Photo Credit To Vilson Frangaj Via Flickr
Crypto exchanges such as Coinbase have managed to grow by taking the mechanics of the traditional world of finance and adapting them to the crypto markets. However, as the crypto market expands in creativity and scope, new exchanges that trade new asset classes in the crypto sphere are taking off. These exchanges have managed to attract the attention of venture capitalists and Coinbase.
One such new-age exchange is Blade. This exchange is a derivatives exchange that will launch in the next three weeks. Before he started the company, Jeff Byun, the CEO and the co-founder Henry Lee had created OrderAhead. This delivery startup was eventually bought in part by Square back in 2017. The duo’s new company shares very little in common with the previous company. However, they are onboarding some of the same investors to help them launch this exchange.
They have raised over $4 Million
Blade announced that they had managed to get $4.3 million from investors in a seed-funding round. Some of the investors include SV Angel, Slow Ventures, A.Capital, Adam D’Angelo, Justin Khan, and Coinbase.
They Will Handle Perpetual Swap Contracts
Perpetuals are an instrument for crypto trading. According to Byun, this is the fastest-growing area of the crypto trading world. This makes it possible for traders to bet on the future value of crypto in relation to another. Best of all, these instruments have no expiration date, unlike the fixed futures. Traders are able to bet on how the price of BTC will increase in relation to the USD. However, they can also bet on the price relative to other coins such as Monero, Zcash, Binance Cash, and Ripple. Currently, Blade already has a few options that they will launch in three weeks’ time
One of the most notable spins on the perpetual trading area that Blade has is that the contracts will be set up on the simplified vanilla contracts. Additionally, the perpetuals will be settled and margined in USDT Tether. It is also worth noting that the exchange will offer very high leverages on trades, which is up to 150X for the BTC-KRW and BTC-USD.
While Blade is raising funds from US-based venture capitalists, US investors are not allowed to take part in this exchange. The US regulators have been quite strict when it comes to crypto regulation. Thus, most trading activity will take place on exchanges that are outside US jurisdiction. The Blade exchange is registered offshore but it has a US subsidiary. Its main market is in East Asia.
Byun added that the market was bifurcated. He noted that there were crypto exchanges such as Gemini or Coinbase, which could operate in the US are also highly regulated. On the other hand, there were exchanges that cater to non-US residents, which have less regulation. These minimally regulated exchanges had the most volume.
While the exchange has not yet launched, its founders have some bold ambitions. They claim that they want to become the Chicago Mercantile Exchange of the crypto world.