Bitcoin derivatives exchange, Kollider, has raised $2.4 million, which it intends to use for expanding and building its own Lightning-native financial tools. The money was raised in a seed funding round featuring Lemniscap, Polychain Capital, Okex, Pfeffer Capital, Alemada Ventures, and other investors.
The company’s core product is an exchange on the Lightning Network. It refers to this as “the world’s first Lightning-native derivatives exchange.”
“We had to battle-test the exchange,” said Konstantin Wünscher, Kollider co-founder. “It’s an exchange completely built from scratch. We improved it, built upon it, and added some features that you can’t get anywhere else, especially the native Lightning integration.”
Being Lighting native will allow Kollider users to instantly open and close positions directly from their Lightning wallets. They will not have to fund accounts in advance like with traditional derivative exchanges and makes for a faster trading experience.
Kollider will also use the funds to build stablecoins and a Lighting-enabled Bitcoin wallet. The latter will be unveiled as a Google Chrome extension fully integrated with other products in the Kollider ecosystem.
The exchange utilizes synthetic stablecoins that mimic stablecoins rather than use actual stablecoins.
In Kollider’s case, the synthetic stablecoin achieves stability by maintaining a long (buy) and short (sell) position in Bitcoin.
The idea is that when you hold one Bitcoin, you’re obviously long. But then you use a futures contract and you go short one Bitcoin at the same time. When the price goes up, the Bitcoin you hold will obviously appreciate and the value of the short position will depreciate and they cancel each other out. You basically take a market-neutral position."
This approach will also allow users to create synthetic stablecoins pegged to various currencies like USD, Euro, Pound, and others. Furthermore, loans will not be overcollateralized.