Digital assets: Solana options protocol debuts leveraged options play

DeFi derivatives protocols Cega Finance has announced three new launches following a recent round of fundraising.

The Singapore exotic structured products DeFi protocol based on the Solana blockchain has launched on Ethereum Mainnet, rolled out a new range of Leveraged Options Vaults (LOVs), and created trading firm Tras Mobian.

The team is excited to offer the best execution in the market through a competitive in-house liquidity maker -  Arisa Toyosaki, Cega

With the launch on Ethereum Mainnet, the firm brings its exotic options structured product vaults to the largest L1 blockchain. Cega’s smart contracts on Ethereum Mainnet have been double audited to eliminate security attack vectors that could compromise user funds and to ensure code security. Cega audits were performed by Ottersec and Zellic - no critical vulnerabilities were identified, and all code security recommendations were implemented to further strengthen the codebase.

Cega is also launching a LOV strategy that offers up to 5x higher yields ranging from 20% APY to 109% APY without the need for additional collateralisation. Instead, LOVs use an options structured product involving a put spread to create a new DeFi primitive.

‘Unlike conventional leveraged products, the LOV does not require additional liquidity accessed through redemptions of user-funded margins or overcollateralization, which solves the issue of liquidity fragmentation and scalability of leveraged products,’ stated the firm.

Leveraged Options Vaults will launch within Q2.

Cega has also launched trading firm Tras Mobian to respond to demand for new features and product R&D - a small team at Cega has spun off to launch a market maker business. In the past, Cega has offloaded all positions to external market makers.

‘The team is excited to offer the best execution in the market through a competitive in-house liquidity maker and tap into the multi-trillion dollar exotic derivatives market,’ said Arisa Toyosaki (pictured), co-founder and CEO of Cega.

The launches follow the completion of a US$5 million funding round led by Dragonfly Capital, Pantera Capital and Robot Ventures, bringing the total seed funding raised by the startup to US$9.3 million.

New collateralised ETN provider enters market

Fineqia International has announced that its subsidiary, Fineqia, has received approval of its base prospectus by the Liechtenstein Financial Market Authority (FMA) to offer exchange traded notes (ETNs) collateralised by digital assets.

Fineqia is domiciled in Liechtenstein, which is part of the EU's single market. The base prospectus complies with the EU's Prospectus Regulation (EU) 2017/1129, and the EU’s passport directive.

Fineqia's CEO Bundeep Singh Rangar (right) said: ‘The approval process was rigorous. (…) The base prospectus will allow us to provide new investment products and furthers our objective to bring innovation to the digital asset industry.’

Fineqia's base prospectus outlines underlying digital assets including fungible tokens such as Bitcoin, Ethereum, Cardano, Polkadot, Uniswap, Stellar and Tezos, as well as non-fungible tokens (NFTs).

Exchange-traded products (ETPs) are an overall category that can include exchange-traded funds and notes, each of which require specific approval.

Fineqia's research revealed that ETPs with underlying crypto assets worldwide had a one percent increase in assets under management (AuM) in February reaching US$28 billion, as the crypto market value increased by 1.5% during the same month.

Fineqia International launched its wholly owned subsidiary, Fineqia, in Liechtenstein on 2 November 2022.

Boerse Stuttgart Digital licensed for crypto custody

Blocknox, part of Boerse Stuttgart Digital, has received the final license for its business operations as a crypto custodian from the German Federal Financial Supervisory Authority (BaFin).

Under the brand Boerse Stuttgart Digital, Boerse Stuttgart Group has bundled all its cryptocurrency and digital asset activities to offer institutional partners a one-stop solution for accessing and trading cryptocurrencies, along with fiduciary custody – ‘all from a single source and with the highest security standards’.

European banks, brokers, asset managers, and family offices can use these trading and custody solutions for their own digital asset offerings, said Matthias Voelkel, CEO of Boerse Stuttgart Group.

‘This is the first time that an established market participant has been licensed to hold cryptocurrencies in custody without any acquisitions,’ he said. ‘We are now the only one-stop-shop that's fully regulated by BaFin in Germany for brokerage, trading, and custody of digital assets.’

‘Reliability, stability, and transparency form the basis for well-functioning crypto markets,’ said Dr. Oliver Vins (above right), Managing Director of Boerse Stuttgart Digital and of the custodian blocknox. ‘The BaFin license reinforces us on our path to provide financial institutions across Europe with secure access to a growing market for digital assets using these core principles.’

Crossover launches digital asset trading venue

Digital asset trading technology firm Crossover Markets Group has launched CROSSx, its execution-only cryptocurrency Electronic Communication Network (ECN), to meet liquidity requirements of institutions in the spot and derivative cryptocurrency markets.

The firm’s seed investment round was funded by a consortium of market participants in both traditional finance and digital assets including Exness, Flow Traders, Gate.io, GMO Internet Group, Nomura’s Laser Digital, Pepperstone, Think Markets, TMGM, Two Sigma and Wintermute Ventures.

CROSSx is aimed at decreasing trading costs, improving execution quality and enhancing market data capabilities. Crossover avoids conflicts of interest by decoupling trade execution from custody and brokerage, giving institutions the ability to choose their own credit counterparties.

The platform also provides a high level of liquidity customisation, offering clients to create custom dark and lit liquidity pools to choose their counterparty based on desired trade size, spread, toxicity and skew protection.  

Crossover was founded by industry veterans from traditional finance Brandon Mulvihill and Anthony Mazzarese (right) who most recently spearheaded the FX Prime Brokerage business at Jefferies.

DeFi Startup eyes short- to medium-term arbitrage opportunities on Uniswap

MEV Capital, a DeFi-focused institutional investment manager, is rolling out a new impermanent loss hedging product designed to provide downside protection on Uniswap yields.

MEV’s offering has been introduced to potential limited partners via separately managed accounts (SMAs) – its core strategy consists of exotic, short-dated crypto options that are designed to provide downside protection, while generating returns on DeFi yields via Uni v3.

Investor yield is designed to be generated from capturing ‘organic trading volume on the decentralised exchange (DEX) Uniswap. The idea is to lock down initial returns from that yield, then deploying hedges on those assets via options designed to proffer downside protection against impermanent loss.

Options contracts are settled with Singapore-headquartered OrBit Markets which specialises in sector derivatives and structured products and the under wraps commodities market maker, and capital is dispersed accordingly. The crypto options are settled over the counter and are held open for a week or two.

Lithuania-based MEV has US$32 million of assets under management. Its trading is led by chief investment officer Laurent Bourquin (right), a former investment banker at French bank Société Générale, where he worked on leveraged finance products, as well as additional asset classes.