Venture capital firms can’t get enough of DeFi at the moment. The latest protocol to secure a fat investment is Vega.

In a March 18 announcement, Vega revealed that it raised $5 million in its latest funding round led by Arrington Capital and Cumberland DRW. Participants also included Coinbase Ventures, ParaFi Capital, Signum Capital, CMT Digital, CMS Holdings, and a number of others.

There were also several big industry names from the DeFi Alliance investing in the platform. These include Aave founder Stani Kulechov, Enzyme Finance Founder, Mona El Isa, CEO of Terraform Labs, Do Kwon, and co-founder of Kyber Network, Loi Luu.

The new investment brings Vega’s total funding raised to more than $10 million.

Improving on AMMs

Founded in 2018, the Vega project aims to improve on AMM-based decentralized exchanges. It does this by adding active pricing with limit order books as well as passive liquidity pools.

The protocol also aims to offer an alternative to centralized trading exchanges and derivatives platforms. It launched a testnet in March 2020 and is now nearing a mainnet release.

The optimized DeFi platform has “high performance, very low fees, low margin requirements/high capital efficiency, and the capability to support sophisticated derivatives products.”

According to Vega co-founder, Tamlyn Rudolph, market makers could earn between 10-20 times that offered by traditional centralized platforms.  

The fresh capital will enable the team to accelerate the mainnet launch roadmap scheduled for the end of Q2 2021. The VEGA governance and DeFi utility token will likely also be announced in April, according to the roadmap.

The team is currently working on improvements to liquidity mining, fostering partnerships that will boost the user experience, and building and supporting the Vega community.

More DeFi Derivatives

ParaFi Capital investment analyst, Anjan Vinod, stated that the multi-trillion-dollar derivatives market is missing out on the core DeFi stack.

He added:

“Vega disrupts the intermediaries traditionally controlling market creation, settlement, collateral management, and pricing in the derivatives market.”