Solana Protocol Gets $3M in Seed Funding To Do DeFi Margin Trading

February 25, 2022 6:02 pm

A Solana-based protocol named ‘MarginFi’ has recently raised $3 million from two major crypto investment firms with the goal of providing a simplified way to do margin trading in a decentralized finance ecosystem.

The two crypto investment firms that were involved were reported to be Multicoin Capital and Pantera Capital which co-led the investment round together with additional participation from other investors such as Sino Global Capital and Solana Ventures.

The new capital will be used to drive development for this unique protocol which will hopefully attract a lot of institutional and retail trading clients to the Solana ecosystem which is known for the speed and efficiency of its blockchain transactions.

The protocol will be launched into an environment called a development network and will continue to support institutions at the same time.

Blockworks.co reports:

Funding will be used to drive community and ecosystem development and launch the protocol into a development network (DevNet) while supporting institutions and partner integrations, per the release.

While still in its infancy, the protocol’s DevNet is slated to launch by the first quarter of this year with an aim to flesh out its interoperable cross-protocol offering.

Marginfi is aiming to bring “institutional-grade” margin trading for institutional partners and trading firms interacting within the Solana ecosystem.

Trading margin refers to the act of borrowing money to buy financial assets. Traders who use margin attempt to take on leverage and gain exposure to assets in a more capital-efficient way.

Marginfi is expected to develop its protocol to make it easier for traders, trading margin, to manage open positions across different DeFi (decentralized finance) protocols via a single dashboard.

The company has stated that the recent growth in financial products within the decentralized finance space has indicated that this is an area that many institutions are looking to get involved in.

Blockchain ecosystems that are equipped with the right protocols and platforms such as Solana would be able to benefit from these emerging trends.

Investors are expecting protocols like MarginFi to potentially have over a billion dollars in capital flowing through it as more and more institutions start moving their trading capital into the ecosystem.

The roadmap to achieve such a milestone is already being planned by the company as it prepares to launch the new protocol into the DevNet environment.

FinYear reports:

“Trading firms continue to tell me their needs surrounding a unified global account to manage assets.

They love how this approach provides an upgraded risk framework to move quickly with exposure to underlying trading protocols – because now there are default safeguards at the global account level.

Given that context, Marginfi is a way for trading firms to globalize on-chain positions and effectively execute arbitrage through a single account,” said MacBrennan Peet, Head of Growth, Mrgn Labs.

Mrgn Labs is focused on whitelisting new institutions with the goal of $1B moving through the protocol by end-of-year.

The team at Mrgn Labs also plans on launching several trader-focused initiatives at the intersection of curated retail and institutional traders in Q1 leading up to its DevNet launch.

With the development and upcoming launch of this new protocol, more institutional and retail traders who are already in the DeFi space might select Solana as their preferred choice.

Join the conversation!

We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.