Friktion Labs Raises $5.5M to Bring The Best of TradFi to DeFi, CEO Says

key takeaways

Friktion is Solana’s largest options protocol and the third largest options protocol across all networks, with over $100 million total value locked
“I subscribe to the Sandbox world view that you can build anything from scratch as long as you don’t stop building it,” Marwaha said

Friktion Labs, the development team behind Friktion, has closed a $5.5 million round in its first capital raise, CEO and Co-founder Uddhav Marwaha told Blockworks on Thursday.

Friktion, in which Blockworks Co-founders Michael Ippolito and Jason Yanowitz are investors, is Solana’s largest options protocol and the third-largest options protocol across all networks, with over $100 million in total value locked. It focuses on providing portfolio management and structured products, as well as protocols built on Solana’s network.

The team is also building an on-chain full-stack portfolio and risk management platform for individuals, institutional managers and DAOs, Marwaha said.

“We want to bring the best of TradFi to DeFi,” Marwaha said.

“We want to onboard the next billion users who have no idea what DeFi is and are moving down the risk spectrum and getting traditional products more comfortable with the risks of DeFi and education,” he added.

The funding will be deployed into building Circuits, which are a novel liquidity and portfolio management system to drive long-term capital inflows and return generation for DAOs, the company said in a statement.

Investors in the raise include Jump Capital, DeFiance Capital, Pillar, Libertus Capital, Delphi Ventures, Sino Global Capital, Tribe Capital, Castle Island Ventures, Dialectic, Petrock Capital, Solana Capital.

Additionally, a group of derivatives traders and market makers from Genesis Trading, Alameda Research, LedgerPrime, QCP Capital, CMS Holdings and others will be brought on board, the company said.

“I subscribe to the Sandbox world view that you can build anything from scratch as long as you don’t stop building it,” Marwaha said. “That’s not possible in TradFi, [it] would take years to build things in TradFi that can be done in a month in DeFi,” he said.

In late December 2021, the team launched two new products, a call overwriting and a put overwriting strategy. Going forward, it hopes to release additional ones throughout the year.

“There’s a new level of maturity coming to DeFi driven by new entrances,” Marwaha said. “In order to scale this year, there needs to be new products focused on real sources of yield,” he noted.

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