Blade raises $4.3m from Coinbase
Blade, a new cryptocurrency derivatives exchange launching in three weeks, has raised $4.3 million in seed funding from a host of investors, including Coinbase, SV Angel, A.Capital, Slow Ventures, Justin Kan and Adam D’Angelo, according to Tech Crunch.
Prior to starting the company, CEO Jeff Byun and his co-founder, Henry Lee, founded OrderAhead, a delivery start-up platform that was eventually acquired in-part by Square in 2017.
The pair’s newest company shares little in common with their previous venture, but they are bringing aboard some of the same investors to support them. The exchange is tackling perpetual swap contracts.
Perpetuals are a crypto-native trading instrument that Byun says are “arguably the fastest growing segment of cryptocurrency trading.”
They allow traders to bet on the future values of cryptocurrencies in relation to another and the instruments have no expiration dates, unlike fixed maturity futures. Traders can bet on how the price of Bitcoin can increase relative to USD, but they can also make bets relative to other altcoins like Monero, DogeCoin, Zcash, Ripple and Binance Coin.
Blade’s noteworthy spins on perpetuals trading — compared to other exchanges — are that most of the contracts will be set up on simplified vanilla contracts, the perpetuals will also be margined/settled in USD Tether and the company is offering higher leverages on trades.
The crypto exchange is raising funds from Silicon Valley’s VCs, but US investors won’t be legally able to participate in the exchange. US government agencies have been a bit more stringent in regulating cryptocurrencies, so there’s more trading activity taking place on exchanges outside the jurisdiction. Blade itself is an offshore entity with a US subsidiary as its primary market is East Asia.
“It’s kind of a bifurcated market,” says Byun. “Either you have exchanges like Coinbase or Gemini or Bitrex that cater to the U.S. market that are highly regulated or the exchanges that cater to the non-U.S. market that are much less regulated, but that’s where most of the volume is.”
While the company is still three weeks away from launch, the founders have bold ambitions. Byun hopes that Blade will be the CME (Chicago Mercantile Exchange) of crypto.
