Derivatives Firm MYX Raises $5 Million Led By Sequoia’s Former China Arm, HongShan

Summary:
• MYX has a proprietary technology in liquidity provision that focuses on trading volume, ensuring LPs don't rely on trader losses for profit.

MYX, the crypto derivatives platform, has raised $5 million in a seed round that valued the company at 50 million. Lead investor HongShan (formerly Sequoia China) was joined by Consensys, Hack VC, OKX Ventures, Redpoint Ventures, Hashkey Capital, Foresight Ventures, among others.

The MYX team plans to channel the new funds toward creating new trading tools and expanding user education, which it believes is key to unlocking the potential $900 billion quarterly crypto derivatives trading volume. With a key focus on the derivatives market, MYX is certain that the most important thing is to concentrate on growing trade volume overall through innovations in products, mechanisms, and business practices.

In order to solve problems and provide users and LPs with significant benefits, MYX employs a suite of innovative approaches that optimise liquidity, lower trading costs, improve user-friendliness, and strengthen risk control strategies. The long-term objective of the protocol is to make MYX the preeminent decentralised perpetual contract trading platform in the world.

MYX’s innovation in liquidity provision and trading

MYX has set up its platform in a way that market liquidity providers (MLPs) do not profit when traders lose money. Instead, driven by a high volume of trade, they earn much higher profits from transaction fees rather than liquidity-dependent earnings.

Notably, MYX has employed an intelligent funding rate adjustment system, that enables it to bridge the liquidity gap between DEXs and CEXs. Externally, this approach to MLP establishes a leverage-free instrument cushioned from bankruptcy risk. Furthermore, it is flexible and able to work with other protocols without any hitches, including the DeFi ecosystem’s lending and staking systems.

Evidently, this is a disruptive approach to liquidity provision, since liquidity providers (LPs) are only exposed to net open interests under the matching pool mechanism engine.  This approach to enables LPs to manage and mitigate their risk exposure more efficiently and effectively.

With the launch of their LP return swap, MYX has introduced significant disruptions in the role of liquidity providers. The LP return swap feature introduces multiple degrees of scalability and is an important gateway linking market makers and users. It creates a channel through which users can realise consistent returns for their efforts while opening up new avenues of fundraising for market makers.

Furthermore, in order to combat holding costs, MYX has introduced an innovative financing rate structure and does not charge any borrowing fees. Funding rates on the platform are set by the difference between the number of long and short positions.

The MYX team terms user satisfaction as a key priority in its mission. MYX has reduced trading friction significantly using its proprietary Matching Pool Mechanism (MPM) for zero-slippage trading. This guarantees that every transaction is executed at the optimal price.