GammaX Raises $4M to Launch Crypto Derivatives Exchange on Ethereum Layer-2 Solution

GammaX, a Singapore-based company building a new high-performance hybrid crypto-derivatives exchange, announced the closing of a $4 million seed round, backed by zero-knowledge secure technology developer StarkWare and liquidity provider Dexterity Capital.

Other investors in the round include Alphanonce, Cobo, Genesis Trading, Kyber, Ledger Prime, Matrixport, Profluent, Uncorrelated and 01Node, GammaX said in an announcement shared with Decrypt.

“Our mission is to create the world’s fastest, most complete, easiest to use and most responsive exchange available to traders,” Defi Das, the anonymous co-founder of GammaX, said in a statement. “To achieve that, we blend the best aspects of both centralized and decentralized exchanges.”

Over the past few months, GammaX has interviewed “hundreds of traders around the world […] to learn what they want in a next generation perpetual futures exchange,” said the GammaX co-founder.

“What we are hearing is that many of the exchanges available in our industry fall short in a number of areas when it comes to a top trading experience,” added DeFi Das.

More specifically, GammaX says that in order to achieve lower waiting times and a better user experience, the platform’s order book and matching engine are kept off-chain, while settlement and storage of user funds are handled on-chain through smart contracts.

“Fully decentralized counterparties are still not able to provide an adequate user experience for traders, because the blockchain infrastructure is still in the maturing phase. Once the blockchain infrastructure has caught up, we may revisit this decision,” said GammaX’s director of marketing James Ryan Decrypt.

Fee-free trades with GammaX

Unlike many other decentralized exchanges built on EthereumGammaX is built on StarkWare’s layer-2 solution called StarkEx—a trading engine that supports a range of services, including derivatives trading.

Some examples of the applications deployed on StarkEx include dYdX, a popular margin trading platform that follows the order book model, NFT-centric projects Immutable and Sorare, as well as spot decentralized exchange (DEX) DeversiFi.

GammaX says that trading perpetual contracts requires rapid price updates among a variety of trading pairs. Gathering this information is impossible to scale at layer 1 in terms of speed and cost effectiveness.

The StarkEx technology also provides other competitive advantages, such as the ability to keep trading fee-free. The only time a user needs to pay transaction fees is when they make a deposit or withdraw money from the GammaX smart contract.

According to Das DeFi, “Gamma symbolizes high energy and speed in physics and is also used in options trading as a measure of acceleration, which is why we chose the name GammaX.”

“GammaX has an experienced, entrepreneurial team with a track record of bringing innovative products to market,” said StarkWare CEO and co-founder Uri Kolodny. “We look forward to working with them to usher in a new era of derivatives trading.”

GammaX beta launch

GammaX plans to open its testnet to beta testers in the next few weeks before launching on the mainnet later this fall.

There will only be two trading pairs at the start—Bitcoin and Tether, and Ethereum and Tether – both can be traded with 20X leverage. GammaX wants to expand the number of pairs available during the public testnet or mainnet release.

The same applies to the addition of new features: “This will be evaluated during the closed beta phase, where GammaX will work closely with traders to evaluate which features are most important to them and which features make life much easier,” says the project’s vice president. president of marketing James Ryan told Decrypt.

According to Ryan, “GammaX will test exotic derivatives, cross-security margins, as well as intelligent liquidity algorithms to provide deep liquidity for a large number of trading pairs.”

Additionally, like many other exchanges, GammaX is looking at launching its own token with a reward structure that, the exchange says, will appeal to both novice and advanced traders.

Incentives will include trading rewards, referral rewards and the so-called “earn to learn” opportunities, a program focused on educating GammaX users and helping them master the nuances of crypto derivatives.