Home ┬╗ Ostium Labs raises $3.5 million to offer oil and gold DEX permanent swaps.

Ostium Labs raises $3.5 million to offer oil and gold DEX permanent swaps.

Ostium Labs: Pioneering Everlasting Digital Commodities Swaps at the Intersection of Crypto and Traditional Markets

by V. Sinclair
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A cryptocurrency startup called Ostium Labs has secured $3.5 million to create a platform for eternal swaps of digital commodities.’

By providing transparent and adaptable options for trading assets like oil, bitcoin, foreign exchange pairs, and more, it hopes to draw in both conventional commodities dealers and traders who are more familiar with the cryptocurrency market.

Following the completion of a $3.5 million fund round, a cryptocurrency startup plans to merge conventional commodities trading with the world of cryptocurrencies.

Ostium Labs is creating a new protocol for everlasting digital commodities swaps with the support of a wide range of investors, including General Catalyst, LocalGlobe, SIG, and Balaji Srinivasan. The platform’s co-founders, Kaledora Kiernan-Linn and Marco Antonio, hope it will draw both crypto-native traders and traditional commodities traders looking for a more open and flexible alternative to established derivatives platforms.

According to Kiernan-Linn, the protocol will first facilitate trade in perpetuals linked to oil, bitcoin, and oil, he said in a phone interview with The Block. Additionally, it will facilitate trading in currency pairs for the Australian dollar, the pound, the euro, and the yen.

Traditional assets, or assets from the real world, have only made up a small portion of overall crypto-related activity up until this point. Tokenized gold products are traded through companies like Tether and Paxos, although volumes in those goods have been minuscule in comparison to the stablecoins those companies manage. Tether Gold’s market capitalization is $450 million, while USDT’s is $83 billion.

Adding physical assets to the chain

Ash Arora, a partner with Ostium Labs investor LocalGlobe, is one of the group of investors that are eager to see real-world assets, such as stocks, commodities, and real estate, migrate to the blockchain.

She stated in a press statement that access to both financial and physical assets has increased significantly over the past century. “However, consumer access to and transparency in tangible assets still lags far behind, causing trading volumes to decline and fees to increase. We consider a technology upgrade for actual, or “real-world,” assets to be long overdue.

It’s true that this market has historically drawn venture capital, with $1.6 billion raised over 188 investment deals, according to The Block Research, and $907 million invested in such companies in the ┬ápast two years, showing a revival.

Developing real-world assets on-chain, according to Avi Felman of GoldenTree, is merely a question of time because adopting crypto rails is ultimately more effective than the conventional system. “We are going to see a few major launches in the coming months that will change the game.”
Kiernan-Linn thinks the initiative will stand out among the various businesses incorporating real-world assets into their blockchains because to its collaboration with Chainlink. Their derivative pricing will be based on a cutting-edge pricing fee structure that the project will introduce. Chainlink unveiled additional data streams earlier this month with the intention of assisting decentralized financial initiatives and offering them pricing costs that permit high-speed, low-latency trading. This innovation drastically cuts down on the amount of time it takes for asset pricing data to update on-chain, bringing it into compliance with Wall Street firms’ high-speed trading standards. According to Kiernan-Linn, transactions on the protocol will be settled in USDC.

The US Federal Reserve’s decision to leave interest rates unchanged while also signaling intentions to raise them higher by the end of the year has simultaneously convulsed traditional markets. This has caused the market to experience new anxiety over the possibility of a recession. With commodities like gold and oil falling while bond yields rose, it has also been interesting from a macro perspective.

“In the past 18 months, perpetuals have expanded significantly. For traders who seek direct on-chain exposure to a wider variety of asset classes, the market does not currently have a dedicated platform, according to Kiernan-Linn. “We’re building Ostium to fill this gap and accelerate RWAs’ shift from narrative to reality, which will drive the next wave of mainstream adoption,” the company says.

In actuality, according to General Catalyst partner Nick van Eck, Ostium is a brand-new type of decentralized finance enterprise.

According to him, the company is creating a brand-new product category on top of pillars that are already well-established in the market.

“I think the last bull market witnessed the creation of most of the fundamental DeFi building blocks, with many companies making incremental improvements,” he said in a telephone interview. “It is fascinating to witness fresh ideas entering the market that cater to an entirely different audience.”

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