OpenTrade, provider of on-chain structured finance products for Web3 treasuries and corporations, has raised just over $1.5 million in a funding round led by crypto-native venture capital firm Sino Global Capital.
Other supporters in the funding round included Circle Ventures, Kronos Research, Kyber Ventures, Polygon Ventures and Outlier Ventures. The capital will help OpenTrade scale its operations before launching in the second half of this year.
Initial products include liquidity pools for US Treasury bills, investment grade commercial paper and investment grade supply chain financing. Tokenized access to traditional financial products, such as U.S. short-term debt securities, such as government-backed short-term debt securities, are gaining popularity as a way to tap into the crypto market while managing volatility amid a protracted bear market.
The decentralized finance (DeFi) protocol platform is built on Circle’s DeFi and payments infrastructure and runs on Polygon and Ethereum.
How it works
Based in London and Palo Alto, OpenTrade was founded earlier this year and leverages a global network of financial institutions and business-to-business (B2B) networks to create on-chain liquidity pools with specific investment criteria, underlying assets and target returns, according to the company website. Assets backing each pool are held in segregated accounts in a remote bankruptcy structure by a regulated custodian to mitigate risks.
Users can deposit USDC stablecoins or euro coins (EUROC) from their wallets into the OpenTrade liquidity pools. In return, the user receives an ERC-20 token, which represents a prorated claim to the net asset value (NAV) of the pool and its underlying assets. To withdraw, a user can redeem the Liquidity Pool Tokens for the equivalent amount of USDC or EUROC, an amount that includes a pro rata share of the principal and accrued interest.
Financial support
The OpenTrade founding team includes CEO Dave Sutter and Chief Commercial Officer Jeff Handler, who previously worked at Centre, the consortium co-founded by Circle and Coinbase to govern USDC. Also part of the team is Michele Bisceglia, who was previously a partner at the advisory and wealth management firm AgFe.
The story goes on
As part of the founding of OpenTrade, Bisceglia and advisor Steve White formed Five Sigma, a dedicated structured finance and investment advisory firm spun off from AGFE to manage OpenTrade’s off-chain operations.
Five Sigma currently has over $700 million in assets under management.
Read more: Crypto Trading Legend’s Next Step Puts US Treasury Bonds on Blockchains, With Plans for Corporate Bonds Too
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