Solana-based DEX Orca Closes $18M Series A to Build AMM

Solana solves the trilemma of decentralization, security, and stability, said Grace Kwan, co-founder of Orca


Source: Orca


key takeaways

  • Orca is one of the many DEXs that has emerged on the Solana protocol
  • Kwan says that Ethereum’s high gas fees exclude all but the largest whales, creating a market for Solana-powered Orca

Orca, a DEX powered by the Solana protocol, announced today that it had closed an $18 million Series A led by Polychain, Placeholder and Three Arrows Capital with participation by other notable names like Sino Global, Collab+Currency, Coinbase Ventures and Solana Capital.

Launched in February, Orca has consisted of a two-member team with eight contributors that come from many blue-chip and TradFi companies like Google, Amazon and McKinsey. Since Orca launched in February, it’s one of the only exchanges that has committed to launching a public governance token. Since then, the protocol has reached $750 million in lifetime trade volume, $250 million in total value locked and over 18,000 monthly unique wallets, Orca said in a release. 

Speaking with Blockworks, Orca co-founder Grace Kwan said that Orca, one of the first DEXs to be built on Solana, will use the proceeds of the round to build a capital-efficient and user-friendly automated market maker (AMM) for the DEX. AMM’s are DeFi’s alternative to traditional order books on centralized exchanges, where liquidity is provided by users holding a liquidity provider (LP) token and pricing as well as matching done by automated algorithms. 

Orca didn’t raise a traditional seed round prior to the series A, but rather received a development grant from the Solana Foundation to bootstrap the operation. 

“During our user research, one of the biggest things we heard was that Ethereum’s high fees crowd out beginner users,” Kwan said. “The high fees mean that it’s only worth it to move thousands of dollars of assets at a time. This blocks out DeFi for anyone but whales.”

Grace Kwan, co-founder, Orca

Kwan said that developing on Solana isn’t without its challenges. Initially, there was a lack of developer documentation and tooling but these are things that she and her team are seeing rapidly change. Now, working with Solana is “not much harder than developing on Ethereum if you are experienced in the core concepts of blockchain,” Kwan said. 

Nimble DEXs such as Orca have been a subject of investor interest after Uniswap, the first and best known, started nipping at the heels of established giants like Coinbase. In March, Delta, an India-foused DEX raised $5 million with a small, lightweight team, and 0x closed a $15 million round in February led by Pantera Capital.

Although Coinbase’s volumes aren’t in the sights of the likes of Uniswap or Orca, for investors, the thought of a small team creating a product that can pump through billions of dollars of volume is an interesting proposition. According to CoinGecko, DEXs, as a category, average  $7.4 billion in volume per day. After all, Orca — with its two full-time staff and eight contributors — have brought in $18 million allowing it to double or triple the size of its team and have years of runway.

Orca’s token is currently trading at $6.70, up 6.6% on-day, according to CoinGecko.

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