Delta One, a Solana-based decentralised finance (DeFi) protocol, has raised $9.1 million in a seed investment headed by Alameda Research and Ship Capital, a DeFi developer collective. The funds will be used to further the protocol’s fundamental development as well as the ecosystem’s expansion.
By investing in baskets or vaults of crypto options, a type of derivative that grants the customer the right to buy or sell an underlying asset at a specified price on a set date, the Delta One protocol provides users with an automated, low-risk means to earn yield. Options trading has long been popular in traditional finance, but due to its complexity, the cryptocurrency-backed version has only lately begun to spread beyond institutions to individual investors.
Delta One employs a “delta neutral” options trading method, which balances positive and negative holdings inside baskets. As the options approach their expiration dates and the underlying assets’ volatility reduces, investors can profit.
“Because you have this market neutral exposure, you can “set and forget” your trade.” You don’t have to be concerned about ‘Oh, the price is always changing.’ It’s not really reflecting the price too much,” Delta One co-founder Paul Sengh stated.
Solana Ventures, Solana co-founder Raj Gokal, investment firms Electric Capital and AlleyCorp, and Race Capital co-founders Chris McCann and Alfred Chuang were among the other investors in the round.
During the Solana Ignition Hackathon in October 2021, brothers Paul and DJ Sengh founded Delta One. Delta One is trying to grow its ecosystem by collaborating with initiatives that potentially benefit from the protocol’s vaults, such as teams developing new lending markets, reserve currencies, and unique options strategies.
Delta One is exploring the launch of a stablecoin that would allow buyers to earn a consistent yield across all vaults without having to visit the site. According to Paul Sengh, the stablecoin would be linked with Solana Pay.
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