The decentralized finance industry continues to grow and evolve. More complex and customizable products are coming to market, including DeFi-focused structured products. Struct Finance has secured $3.9 million in seed funding to keep pushing the boundaries of innovation.
The Growing Appeal Of Structured Products
Consumers and institutions have shown an increased appetite for investing in structured products. For those unaware, structured vehicles pertain to investing in a product that derives value from an underlying asset. It is an indirect way of gaining exposure to either common markets – currencies, indices, stocks – or exploring more exotic options, like cryptocurrencies.
If the crypto industry aims to keep growing, more appealing vehicles for mainstream users are necessary. Derivatives have proven very popular in that regard. These solutions provide exposure to cryptocurrencies without managing the asset in question. Many investors and speculators seek exposure to the price performance of Bitcoin, Ethereum, or other assets, creating a substantial market.
However, there is room to keep evolving the appeal of cryptocurrency and decentralized finance. Tapping into structured products – the decentralized variant, rather than those issued by traditional providers – is crucial. The structured products markets have grown to over $7 trillion in conventional finance, creating tremendous liquidity and opportunity for the DeFi and crypto industry. Now is the time to build the necessary infrastructure to explore such investment vehicles.
There are several downsides to traditional structured products. First, parameters available across derivative instruments are static and determined by developers. Additionally, there is fragmented liquidity and high slippage to consider. Despite these drawbacks, the industry keeps thriving, yet decentralized solutions remain the future.
Struct Finance Decentralizes The Products
Achieving decentralized structured products is possible with the help of Struct Finance. It takes the existing structured product and enhances its appeal through blockchain technology and smart contracts. As a result, users can customize the interest rate instruments and compose them with options to create custom-tailored products. Based on risk appetite, these new products can be as simple or complex as users feel comfortable with.
Woodstock CIO and Founding Partner Himanshu Yadav adds:
“As new capital enters the market, the need for customized structured products will keep growing. Struct Finance is building the core pillars to enable creation of such customized structured products and we are impressed by Struct’s expertise to simplify complex on-chain transactions. We deeply believe Struct will be the go-to platform for all structured products on Avalanche and are thrilled to back the brilliant team.”
The approach by Struct Finance introduces a radical change in the world of structured products. A growing number of available investment options and varying levels of protection highlight the modularity of this approach. Additionally, there is no need for complex pricing. Instead, the focus shifts to highly-competitive yields on various digital assets.
Strong Support By Investors
Struct Finance secured $3.9 million in seed round funding from two dozen top-name companies. Investors include Antlet, Arcanum Capital, Bison Fund, Double Peak, Finality Capita Partners, Woodstock, etc. The funds will be used to enhance its suite of tools for institutions to customize interest rate products and unlock composability to offer better-suited products to different investor profiles.
Double Peak Founding Partner Galen Law-Kun comments:
“Struct Finance marks our first DeFi Investment into the AVAX Ecosystem. Through the leadership of Louis, Ersin and Miguel, we believe Struct Finance will set the gold standard of templated smart contracts. Thus, allowing people to easily release their own structured financial products either on AVAX or various other ecosystems. Double Peak Group is very excited to be a part of this journey in bringing mainstream adoption to DeFi and in the long term, support a multichain future for Struct Finance.”
The approach by Struct Finance turns heads among blockchain and cryptocurrency investors worldwide. Decentralized finance, currently valued at over $220 billion in Total Value Locked, can experience exponential growth through DeFi-oriented structured products. Moreover, it showcases the versatility of the industry and its underlying technology.