Vega, the First Capital-Efficient Decentralized Derivatives Trading Protocol, Closes $5M Raise with Investment from Arrington Capital, Cumberland DRW & Coinbase Ventures

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The completion of Vega's $5 million funding rounds support the democratisation of derivatives trading and enables the creation of markets that are missing from traditional finance.

By allowing anyone to create and launch a derivatives market, we aim to give people the tools they need to hedge risks unique to their region, profession, or situation

Vega, the first capital-efficient, decentralized derivatives trading protocol that bridges traditional finance and DeFi, raises $5 million from leading VCs and traditional trading firms, such as Arrington Capital, Coinbase Ventures, and Cumberland DRW.

The rounds, led by Arrington Capital and Cumberland DRW, support Vega’s mission to democratise markets by enabling anyone to create and launch a derivatives market while tackling some of the challenges that plague decentralised systems and have prevented their widespread adoption. By eliminating centralized gatekeepers and decentralizing governance, Vega allows for instant settlement (< 1 sec), removes conflict of interest from markets, reduces fees, and enables the throughput (up to 10K TPS) necessary for high-volume derivatives trading.

Other raise participants include ParaFi Capital, Signum Capital, CMT Digital, CMS Holdings, Three Commas, GSR, SevenX Ventures, and ZeePrime Capital. The DeFi Alliance also joined as an investor alongside Aave CEO & Founder Stani Kulechov, Enzyme Finance Founder Mona El Isa, Co-Founder and CEO of Terraform Labs (TFL) Do Kwon, and CEO and Co-Founder of Kyber Network Loi Luu. Follow-on contributions were made from Hashed, Eden Block, Greenfield One, KR1, gumi Cryptos Capital, and Monday Capital, who all participated in the October 2019 seed round investment led by Pantera Capital.

Founded by TechCrunch’s Michael Arrington, Arrington Capital believes that Vega is one of the most pioneering protocols in DeFi. Arrington Capital Partner Ninos Mansor commented, “Vega will be to derivatives as Uniswap was to the spot markets. Any derivative can be launched on-chain in a highly performant and capital efficient environment. Just as the AMM primitive gave birth to an entirely new world of trading, we believe that Vega will unlock nascent collateral and reimagine crypto derivatives from the ground up.”

Started in 2014, Cumberland is now one of crypto’s oldest and largest liquidity providers and brings its deep expertise in traditional capital markets to this space as a lead investor in Vega. “As we look at the complicated market structure issues for today’s investors, we are excited to support novel solutions like those offered by Vega,” said Brian Melville, Head of Strategy at Cumberland DRW. “We strongly believe technology has the ability to make markets more efficient, more democratic and more transparent—all issues that have been at the front of many of today’s conversations, and something that is rightly getting a lot of attention.”

"By allowing anyone to create and launch a derivatives market, we aim to give people the tools they need to hedge risks unique to their region, profession, or situation," expressed Barney Mannerings, Founder of Vega, "Derivatives trading has been a pillar of traditional finance for a long time, but DeFi has not been able to achieve the capital efficiency and throughput required to make decentralized derivatives trading viable, until now. We are very appreciative to all those who contributed to our funding rounds, as this raise is pivotal to ensuring Vega continues towards mainnet launch as the first institutional-grade derivatives trading protocol."

The protocol brings together over two years of engineering efforts and original academic research into on-chain derivatives. In addition to building a customized blockchain focused on performant and scalable trading, Vega presents a suite of innovations in areas including on- chain anti-frontrunning, liquidity incentives, active and passive market making, the CLOB and AMM dichotomy, as well as on-chain circuit breakers and decentralized risk management.    

Vega launched its TestNet in Q2 2020 and has had a number of iterations since. Concurrently, the team launched a Markets and Liquidity Programme in June 2020 with eight founding members joining as the protocol’s earliest institutional adopters. The upcoming Flamenco Tavern release will launch liquidity mining onto the TestNet, characterized by a unique blend between active and passive liquidity provision.    

Vega is currently advancing towards its Mainnet release with plans for enabling self-custodied cross-chain collateral, and building a trustless bridge into the Ethereum ecosystem. Future deployments will widen Vega’s scope into other major blockchains including Bitcoin, Polkadot and Cosmos, driving toward Vega’s overarching mission to democratize derivatives infrastructure.

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For media inquiries, please contact Kili Wall at (310) 260-7901 or Kili(at)MelrosePR(dot)com.

About Vega
Vega is a capital-efficient, decentralized derivatives trading protocol that bridges traditional finance and DeFi. By eliminating centralized gatekeepers, Vega enables high throughput, instant settlement, and low-fee trading. Vega increases access to risk hedging and wealth-creation opportunities by enabling anyone to create a new market, meeting the needs of SMEs and traders around the globe.

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Kili Wall
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