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Solana portfolio and risk manager Friktion announces capital raise of $5.5m

Source: Friktion

Friktion Labs is excited to announce a capital raise of $5.5 million from Jump Crypto, DeFiance Capital, Pillar VC, Libertus Capital, Delphi Ventures, Sino Global Capital, Tribe Capital, Castle Island Ventures, Dialectic, Petrock Capital, Solana Ventures. Alongside, Friktion has brought on board a group of industry-leading derivatives traders and market makers in Genesis Trading, Alameda Research, LedgerPrime, QCP Capital, CMS Holdings, Orthogonal Trading, and GSR.

Three weeks into Mainnet launch, Friktion is Solana’s largest options and structured products protocol with over $100 million deposited across two strategies (Volts) and supporting 11 top crypto assets.

This funding will be deployed into building Circuits, a novel liquidity and portfolio management system built to drive long-term capital inflows and return generation for DAOs. Circuits enable a new generation of risk-aware DAOs — responsible for maximizing long-term value and managing capital (Current). Circuits are powered by Volts, Friktion’s native return generation strategies and Inductors, balancers and optimizers of Current. Through Circuits, DAOs will be able to access curated portfolio construction and risk management to scale the next generation of DeFi users! We will also be launching a Taskforce grants program (Research Collaborators, Quant Research & Analytics, and User Research), bug bounties, and an Ecosystem Fund focused on development.

Friktion Labs, the development organization building Friktion, is a team of quantitative traders, researchers, and crypto engineers with backgrounds in commodities, treasuries, volatility products, and crypto-assets. We believe that in order for DeFi to serve as the financial rails for 1+ billion users, we’ll need long-term sources of returns paired with a safe and intuitive user experience.

Investor quotes:

Arthur Cheong, Founder and Investor at DeFiance Capital
The DeFi market needs alternative ways to generate sustainable yields (beyond yield farming) and Friktion have found the correct market fit with its structured products offerings.
We believe that Friktion — by providing a complete asset and risk management solution to all DeFi stakeholders, including the currently underserved DAO Treasuries — will ultimately set the standard for Protocol Owned Liquidity and yield strategies within Solana.

Uddhav and Alex are extremely talented and passionate leaders and we at DeFiance Capital are excited to back them on this journey.

Peter Johnson, Partner at Jump Capital
We believe structured products will be an instrumental component in providing greater options for yields and hedges in the crypto market. Friktion has rapidly gained traction with a variety of participants including DAO treasuries by providing an intuitive, easy-to-use interface and a wide range of Volts. We are excited for the Friktion team as they roll out additional products to serve a wide range of yield generation and hedging needs.

Eli, Partner at Libertus Capital
We are excited to support the Friktion team as they build key financial primitives for the crypto ecosystem. Their speed of execution and quantitative trading backgrounds will bring a new wave of creativity and design into DeFi.

Joshua Lim, Head of Derivatives, Genesis Trading
Trading onchain derivatives today feels like trading centralized spot exchanges back in 2014 — market structure is fragmented, operationally cumbersome and still relatively inefficient. Friktion is tackling these issues and building a category leader that offers the right product set for retail end-users and the right tooling for market-makers to provide best pricing.

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