Crypto derivatives protocol MYX raises $5 million in seed round led by HongShan

MYX, an Asia-based crypto derivatives protocol, has raised $5 million in a seed round at a valuation of $50 million.

The funding round was led by HongShan (formerly known as Sequoia China), with participation from investors including Consensys, Hack VC, OKX Ventures, Redpoint Ventures, Hashkey Capital, Foresight Ventures, GSR Markets, Leland Ventures, Cypher Capital, Bing Ventures and Lecca Ventures, according to an announcement today.

Founded earlier this year by Mark Zhang, a former head of futures products at crypto exchange Huobi, MYX is a decentralized derivatives exchange that uses a so-called peer-to-pool-to-peer model, and which “uses intelligent fees and exposure hedging mechanisms to ensure the stability of the protocol and provide sustainable high returns,” the report said in July blog post.

Accepting DeFi derivatives

Zhang, CEO of MYX, said in an interview with The Block that a major challenge for the industry is the growing awareness and acceptance of decentralized derivatives trading by users. “A key reason for this is that existing products do not meet the trading needs of these users,” he said, adding that with the newly raised capital, the team plans to work on user education as it develops its trading tools.

MYX said in a statement that its matching pool mechanism engine “disrupts the traditional model” as liquidity providers are exposed only to net open interests under the engine. Such an approach “allows LPs to focus on skillfully managing and mitigating risk, rather than being tied to specific long or short positions or relying on traders’ losses for profits.”