December 9, 2021
Paradigm, the zero fee, institutional liquidity network for derivative traders, today announced the closing of a $35M Series A funding round. The round values the company at $400M and was co-led by Jump Capital and Alameda Ventures. The Company is bridging the infrastructure gap between crypto and traditional finance by serving as a liquidity access point to institutional buyers and sellers for large and/or complex derivatives trades across both CeFi and DeFi markets.
Over 25 investors participated in the Series A, including Genesis Trading, QCP Capital, Nexo, Optiver US, IMC, GSR, Akuna Capital, Babel Finance, MGNR, Avon Ventures, CMT Digital, Pattern Research, executives at Goldentree Asset Management and Amber Group. Investors from previous seed rounds Dragonfly Capital, Digital Currency Group, Vectr Fintech Partners and Mirana Ventures, Venture Partner of Bybit and BitDAO also participated.
For institutional investors, finding liquidity on-demand that is tailored to their price, size, immediacy, and risk preferences can be an extremely challenging task. Before Paradigm, institutional traders had to maintain their own private network of counterparty relationships to help source liquidity, particularly for large and multi-leg/complex trades. Moreover, no standardized workflow automation tools exist today to facilitate the negotiation and execution of complex, multi-leg and multi-product strategies via a single atomic transaction.
With Paradigm, traders connect directly with institutional counterparties in the Paradigm network to get better-than-market prices (often at mid pricing) and for much larger sizes. Paradigm also provides all the workflow automation tools necessary to facilitate multi-leg and multi-product strategies with underlying hedges via a single executable structure. This increases trading precision, eliminates leg risk and lowers execution costs since all legs and hedges are executed as one single block, as opposed to piecing the trade together manually on screen. In addition, the platform is also free to use!
The Company works with over 600 institutions and trading volumes on the network have increased upwards of 1300% year-over-year to $10B in total volume traded per month. Paradigm has grown significantly in 2021, increasing its headcount 3x while capturing a 30% market share of options volume globally.
Paradigm’s product suite includes complex orderbooks focused on spreads and combinations, spread matrices for futures, and loans rate curves. Traders on Paradigm choose the settlement venue where they want their trade to settle, which allows Paradigm to remain non-custodial and charges no fees. “We estimate that large and multi-leg orders account for roughly 30% of global listed derivatives volumes, or roughly $50-75 B per day,” Anand Gomes, Paradigm’s Co-Founder and CEO stated, “At Paradigm, we are focused on establishing a robust network before monetizing. This funding round allows us to continue building out our network of institutional traders, CeFi exchanges, and DeFi protocols, while also enhancing our 24/7 customer support, and expanding upon our current product offerings to better accommodate the needs of our clients.”
Saurabh Sharma, Jump Capital
"Institutional Infrastructure in Crypto Capital Markets is still nascent and liquidity highly fragmented", said Saurabh Sharma, Partner at Jump Capital. "Paradigm is disrupting that by providing a single point of access to global liquidity and a unified execution & settlement layer to most institutional traders in the world.”
Ramnik Arora, Alameda Ventures
“For every large or complex trade, the trader needs to ping multiple chats, get quotes and process them manually, settle them on a one-off basis. Paradigm makes this workflow seamless for complex derivatives transactions delivering pricing efficiency, low execution and settlement risk. As the industry matures, Paradigm will play an increasingly important role in the ecosystem.”
Andrew Quine, Akuna Capital
"Paradigm’s efficient workflow saves time and reduces settlement risk for our trading desks. Their diverse network of counterparties and liquidity providers will continue to grow as they expand to new products."
Liam Smith, Optiver US
“We’re excited to support Paradigm in their mission to bring on-demand liquidity to the crypto options market. Through their innovative RFQ platform, Paradigm is helping to facilitate price discovery and deepen liquidity in the emerging digital assets volatility space, which closely aligns with Optiver’s commitment to competitive and transparent markets.”
Darius Sit, QCP Capital
QCP Capital, one of the largest traders on the platform and lead investors said “Paradigm provides the missing link for institutions looking to move into crypto.” Darius Sit, cofounder at QCP said, “Liquidity has been a persistent problem in the crypto space for sophisticated traders looking to trade large and complex products. Paradigm's approach to building a liquidity network powered by CeFi/DeFi agnostic settlement infrastructure is transformational, not just in crypto but for capital markets broadly.”
Michiel Knoers, Head of Trading, IMC
“Paradigm offers a unique proposition to institutional investors seeking liquidity in derivatives on digital assets. We are proud to team-up with Paradigm to continue to improve this market for its participants and help bring best in class liquidity to this growing ecosystem.”
David Toh, Mirana Ventures
“We are excited to return as investors in Paradigm. We believe Paradigm is one of the most promising institutional liquidity networks and we are excited to back the team in building such a game-changing trading infrastructure. As a returning investor, we are committed to collaborating with Paradigm on strategic initiatives and supporting the team in scaling new heights.”
Tatiana Metodieva, Nexo
"Nexo aggregates and executes sizable trading volume on behalf of its global customer base, whereby market discovery and liquidity often pose concerns. Paradigm's network of liquidity providers can alleviate a number of risks, and enhance market and price efficiency for large institutional players."
Sam Hallene, CMT Digital
"As the demand for secure, reliable and cost efficient digital asset trading services continues to increase, access to liquidity has remained one of the largest and most pressing challenges,” said Sam Hallene of CMT Digital. “With a growing network of counterparties and automated tools to support sophisticated institutions, we believe Paradigm is well-positioned to fill this fundamental gap.”