DeFi protocol Elixir has closed a $7.5 million Series A fundraising round at a $100 million valuation, aimed at helping improve liquidity on decentralized order book exchanges.
Hack VC led the round, with participation from NGC Ventures, AngelList Ventures, Bloccelerate and angels from Ledger Prime, Genesis Trading and Hudson River Trading, among others, according to a statement.
“Hack VC is eager to invest in new primitives that will advance the space and is proud to have led Elixir’s Series A raise,” said Hack VC Managing Partner Ed Roman. “Exchange liquidity has always been an issue, especially for order book DEXs and token projects where capital is highly inefficient: reliant on a small handful of companies. The adoption of Elixir by order book exchanges across the space, combined with the strong technology that has already made it more than two years, positions them as one of the leaders in order book liquidity on exchanges.”
From seed to Series A
This latest Series A funding round follows Elixir’s seed round in January, which raised $2.1 million with backing from FalconX, Commonwealth, Chapter One, Ava Labs and BitMEX founder Arthur Hayes.
“We are thrilled to have closed our Series A as we head into our launch,” said Philip Forte, co-founder and CEO of Elixir. “With this latest round of funding, we can expand our personal team and strengthen our engineering efforts to accelerate our roadmap to support additional use cases leveraging our protocol infrastructure.”
Elixir’s current 17-person team consists of veterans from companies such as Gemini, Hudson River Trading and Tokensoft.
Increasing order book liquidity in DeFi
Centralized exchanges have always favored order books as the most efficient trading environment. More decentralized exchanges are now leaning towards this model, but limited liquidity remains a challenge.
Order book-based decentralized exchanges allow users to execute orders directly with other traders in a similar way to centralized exchanges, but on-chain, retaining full custody of their crypto assets while placing trades. This contrasts with the dominant automated market maker DEX model, which uses smart contracts for liquidity pools to facilitate decentralized trading of specific token pairs.
Elixir allows users to directly provide liquidity to pairs on order book exchanges and earn maker rewards with a similar risk-return profile to AMMs, the team said. By driving deeper liquidity, Elixir aims to create a more efficient trading environment characterized by tighter bid-ask spreads and increased volume.
Elixir’s delegated Proof-of-Stake protocol is expected to launch on Mainnet in the coming weeks and integrate with decentralized exchanges such as Vertex, Bluefin and WooFi. According to the team, Elixir will also enable permissionless market features on dYdX V4 early next year.