Alameda Research, the crypto trading firm, has led a $40m investment in Oxygen, a Switzerland-based DeFi prime brokerage. MultiCoin, Genesis Capital and CMS also participated in the round.
Oxygen will launch on Serum, a decentralised ecosystem built on the Solana blockchain.
Sam Bankman-Fried, CEO of the derivatives exchange FTX and an adviser to both Serum and Oxygen, told The Block that the speed (roughly 50,000 transactions per second) and lower costs of the Solana blockchain enable it to host more complex solutions than simple borrow-lending tools – which have so far proven some of the more successful DeFi projects – including prime brokerage.
“DeFi could reach 1 billion users and $10 trillion of on-chain value. But projects have been limited by high fees, congestion and scalability issues,” he said in a press release.
Oxygen helps users with access to liquidity, leverage, yield generation and borrowing to short. One aspect of traditional prime brokerage services it may find more difficult to replicate is so-called “white glove” customer service.
“It’s a lot less white glove than traditional prime brokerage, that’s sort of how crypto is,” Bankman-Fried told The Block. He added, however, that wrappers and interfaces could be used to augment the experience for users.
Oxygen is also announcing an integration with the wallet of Maps.me, a mapping app, which it says has the potential to bring more than 100 million users into the Serum ecosystem.
Bankman-Fried explained that Maps.me users will be able to use this integration to deposit funds into the wallet in the form of tokens, earn yield on those tokens while they are stored, and ultimately pay for good and services such as hotel bookings.
Oxygen is powered by the OXY governance token, which will stage an Initial Exchange Offering on March 11 and list on FTX, BitMax and Serum DEX on March 16.
Token holders are entitled to 100% of Oxygen’s net revenues and serve as the main incentive for investors like Alameda, which has invested in close to 100 projects to date, according to Bankman-Fried.
“We are funding the development [of Oxygen] and in the end what people are getting here is the governance tokens of the protocol,” he said. “These have say over what the protocol does, including getting governance over the revenue from it.”
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