Vovo Finance, a structured products protocol on Ethereum layer 2, is excited to announce a $2-million seed round to build decentralized finance (DeFi) structured products on Arbitrum.
The project’s strategic investors include IOSG Ventures, Matrix Port, LedgerPrime, Zee Prime Capital, Pattern Research, Primitive Ventures, imToken, Kyber Network, Daedalus and CyberX.
Vovo is also delighted to be supported by its angels, including the team from Perpetual Protocol, Pamir Gelebe of Libertus Capital, Roshun Patel of Genesis Trading, Marco of zkSync and many others.
This seed round was completed in January 2022.
In traditional finance, complex financial instruments are typically, and purposefully, gated for the investor elite, securing a much greater risk-reward ratio than for the average market actor.
Decentralized finance (DeFi), on the other hand, is the great equalizer. One of the biggest benefits of decentralized money LEGOs is the ability to build and bundle sophisticated, structured products with smart contracts acting as brokers, granting 100% transparency while demolishing barriers to entry. With on-chain derivatives and fixed-income primitives finally coming of age, Vovo believes that structured products are poised to become a core component of DeFi and one of the industry’s fundamental building blocks.
While options vaults have found a great product-market fit in DeFi, there are still many drawbacks to the existing structured product protocols:
- Risk of centralization or liquidity shortage
- Options restricted to Bitcoin (BTC), Ether (ETH) and a few others
- Limited types of structured products.
Vovo tackles all three of these issues. Its protocol sources liquidity directly from on-chain automated market makers, thanks to the recent explosion in perpetual swap volumes. At the same time, Vovo Is building a wide range of structured products and preferences, including risk levels, market bias, lockup periods, token deposits and more.
The number of possible payoff structures is unlimited.
Vovo has recently launched its first structured product: the Principal Protected Product (PPP), which collects yields from Curve Finance to open high-leverage trades on the GMX exchange. PPPs are one of the most traded items in TradFi, but it’s the first time the same instrument has been introduced to DeFi users.
Another product based on GMX’s GLP token will be launching soon, as well as a slew of yield-enhancement products that Vovo has been working on behind the scenes.