On March 8, Cega Finance announced that it had raised $4.3 million in a seed round led by Dragonfly Capital Partners. There was also participation from various DeFi and crypto VCs, including Pantera Capital, Coinbase Ventures, Alameda Research, and Solana Ventures.
The platform, founded by former UBS derivatives trader Arisa Toyosaki, now has a valuation of $60 million. Cega aims to build the next evolution in DeFi derivatives by introducing “exotic derivative capabilities” to the space, according to the announcement.
Exotic DeFi Products
The team at Cega wants to explore the relatively untapped market of DeFi derivatives which traditionally includes products such as futures, options, and leverage.
The Solana-based platform currently offers basic call/put options with advanced characteristics to create “packaged offerings” for investors. A “fixed coupon note” is one of Cega’s exotic offerings. It uses a basket of puts and a call with knock-in and knock-out barriers. A Put option is used when traders expect the prices to decrease, and a Call is used when they expect an increase in prices.
These types of exotic structured products benefit retail investors as they offer better yield, built-in downside protection, and compounded returns.
Tom Schmidt, General Partner at Dragonfly Capital Partners. Commented that Cega is changing the DeFi space before adding:
“DeFi goes through a process where one team creates an innovative breakthrough financial primitive, which in turns spurs the creation of a whole new category of products and grows the overall market.”
Co-Chief Investment Officer at Pantera Capital, Joey Krug, added that exotic options have proven to be valuable tools for transforming and managing risk. “Now DeFi gives us the chance to re-cast those tools with greater transparency and efficiency,” he added.
March Solana Launch
The Cega platform is set to launch in beta later this month on Solana’s testnet. It plans to expand the product to the industry-standard Ethereum Virtual Machine (EVM) compatible ecosystem soon after.
The Cega team currently consists of just four co-founders, which include traders with experience pricing exotic options.
The total value locked in DeFi has taken a hit over the past couple of months as the underlying assets and the crypto market have retreated. According to DeFi Llama, TVL is currently $200 billion, down 22% from its all-time high in early December.
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