Crypto’s love affair with derivatives drags on. In the week’s largest funding round, Arbelos Markets raised $28 million for a principal trading firm specializing in crypto derivatives. Dragonfly led the seed round, which also drew participation from FalconX, Circle Ventures, Paxos and Deribit, among others.Derivatives are financial contracts that base their value on an underlying asset. Put and call options are examples, as are futures contracts. DeFi pioneered the concept of perpetual futures, a crypto-native innovation that lets futures contracts be traded without an expiration date. Huge leverage, huge risk. But Arbelos is less degen and more institutional. In a press release, co-founder and CEO Joshua Lim called it a “smart principal risk-taker with a strong balance sheet and a flexible product.” Former FTX.US CEO Brett Harrison is building a product in a similar vein. Read more: Ex-FTX US exec Brett Harrison’s startup raises $12M for derivatives brokerageBut Arbelos is not a brokerage. It’s a firm that provides liquidity and infrastructure for the trading of assets including derivatives. The firm will use the fresh funds to “improve its quant trading infrastructure, hire top talent, and expand its access to new markets and its range of products,” Arbelos said in a press release.Arbelos seems to be pitching itself as more trustworthy and grown-up in contrast to the crypto firms that played fast and loose with risk controls and blew up the market in 2022. “Post the collapses of last cycle, Arbelos is rebuilding the DNA of the modern primary dealer, and in the process they’re returning trust & transparency to the space at large,” Dragonfly’s Omar Kanji wrote on X.Peter Thiel-backed Founders Fund led a $13.2 million round in Lagrange. Archetype Ventures, 1kx, Maven11, Fenbushi Capital, Volt Capital, CMT Digital and Mantle Ecosystem Fund also contributed.Lagrange says it’s building a “hyper-parallel ZK coprocessor.” In plainer terms, Lagrange is trying to apply privacy-preserving zero-knowledge proofs in a way that can handle tons of data — as blockchains tend to do. Lagrange has launched zk light clients for Ethereum rollups as an actively validated service on EigenLayer.
