The Maverick Protocol has received significant money from well-known venture capitalists, exiting stealth with $8 million in a strategic round of fundraising.
Pantera Capital led the round, which included participation from Altonomy, Circle Ventures, CMT Digital, Coral Ventures, Gemini Frontier Fund, GoldenTree Asset Management, Jump Crypto, LedgerPrime, Spartan Group, Taureon, and Tron Foundation, among others.
Maverick is developing a “innovative permissionless derivatives protocol” to fulfill demand for more diverse derivatives trading alternatives on decentralized exchanges. Most DEXs currently only allow investors to trade major tokens, as even the largest ones are limited to roughly 30 trading pairs or less. In comparison, centralized exchanges offer hundreds of trade pairings, which explains why they tend to dominate the derivatives industry.
Derivatives account for slightly over half of all daily crypto trading volume, according to Maverick, therefore the possibility for a decentralized derivatives market is “enormous.” To take advantage of this possibility, it has developed a novel protocol that enables the open listing of practically any cryptocurrency, including mid-cap tokens, on permanent markets, with users able to stake any ERC20 token as collateral.
Maverick claims that its strategy opens up new prospects for both traders and liquidity providers. Traders benefit from its patented Gaussian Automated Liquidity Placement (ALP) vAMM, which assures more appropriate liquidity placement around each asset’s market price, resulting in decreased slippage. Meanwhile, LPs benefit from not having to bother about collateral management, resulting in higher overall capital efficiency.
Crypto traders prefer platforms that provide them with access to the latest assets, according to Maverick co-founder and CEO Alvin Xu. He claims Maverick does this with markets generated exclusively by its user community.
“Due to the significant work necessary to spin up a sustainable market, perpetual markets currently lack the potential to quickly list new assets,” Xu remarked. “We’re here with Maverick to shift that paradigm by utilizing ALP.”
Maverick claimed its passive staking mechanism might be used to develop other types of DeFi apps in the future, in addition to helping to create decentralized derivatives markets.
Derivatives based on mid-cap and long-tail assets are in high demand, according to Pantera Capital’s Joey Krug, and Maverick is well positioned to supply that demand.
“Its novel market structure is likely to capture a major portion of the market by offering traders cheap slippage and LPs low-maintenance, capital-efficient staking,” Krug said.