Convergence RFQ, a Solana-based trading platform in development, has raised $2.5 million in a pre-seed funding round.
The round was led by C² Ventures, with participation from Big Brain Holdings, Israel Blockchain Association, Auros Global and others, Convergence RFQ said on Wednesday.
The startup started growing its pre-seed round in the middle of last year and closed it in June this year, co-founder Uwe Cerron told The Block. It was a simple agreement for a future token round at a fully diluted valuation of $30 million, Cerron said.
Convergence RFQ has set the ticker symbol of its “governance” token to CVG.
What is convergence RFQ?
Convergence RFQ is an on-chain crypto trading platform that supports both spot and derivatives.
RFQ, short for request for quote, is a method by which buyers request price quotes from sellers. This method differs from the central limit order book approach used by centralized exchanges and the automated market maker method used by decentralized exchanges. In CLOB, buyers and sellers place orders at specific prices, and trades are executed when matching orders match. AMM, on the other hand, is an algorithmic system that enables peer-to-peer trading by automatically adjusting asset prices in response to fluctuations in supply and demand.
RFQ helps solve the challenges of CLOB and AMM, such as slippage and front-running, according to Cerron, who said Convergence RFQ will have no slippage. According to Cerron, RFQ can generally help market makers and trading desks provide competitive quotes and manage their exposure before executing trades.
RFQ “can provide a much more robust crossover between centralized exchange liquidity and decentralized pricing mechanisms to create a hybrid model that gets best execution for traders, via API,” Deribit wrote in an article last year. “Simply put: RFPs are of truly amazing quality.”
Convergence quotation request for Solana and Arbitrum
Convergence RFQ is currently building its platform on Solana and then also plans to support the Ethereum Layer 2 network Arbitrum, Cerron said. The platform is expected to launch early next month.
There are currently six people working for Convergence RFQ, and Cerron is looking to add a few more people, mainly in the marketing and growth functions.