StockCoin

Crypto Startup Velar Plans Perpetual Swaps Exchange for Bitcoin DeFi After Raising $3.5M

February 2, 2024 | by stockcoin.net

crypto-startup-velar-plans-perpetual-swaps-exchange-for-bitcoin-defi-after-raising-35m

Crypto startup Velar has raised $3.5 million in venture funding to develop a suite of decentralized finance (DeFi) tools for Bitcoin’s emerging DeFi sector. The company’s CEO, Mithil Thakore, revealed that Velar plans to launch the first perpetual swaps exchange that utilizes the Bitcoin network, which, unlike Ethereum, cannot accommodate the smart contracts necessary for DeFi. However, with the rise of side chains and Layer-2 solutions for Bitcoin, the landscape is evolving. Velar is banking on Stacks’ upcoming Nakamoto Release, which will introduce a synthetic bitcoin asset called sBTC that is pegged to BTC. The goal is to enable bitcoin holders to leverage the DeFi potential of their assets without surrendering custody. While Bitcoin DeFi remains largely theoretical, the infrastructure and user base are steadily progressing.

Overview

Crypto Startup Velar

Velar is a crypto startup that has recently raised $3.5 million in funding to develop a suite of decentralized finance (DeFi) tools for Bitcoin. The company aims to address the nascent state of Bitcoin DeFi and the slow infrastructure currently hindering its growth. One of Velar’s key initiatives is the launch of a perpetual swaps exchange that utilizes the Bitcoin network. This exchange will enable traders to leverage their Bitcoin holdings and access the benefits of DeFi without relying on Ethereum’s smart contract capabilities.

Perpetual Swaps Exchange

Velar’s primary focus is on launching a perpetual swaps exchange for Bitcoin. Unlike traditional futures contracts that have expiration dates, perpetual swaps do not have a fixed maturity date. This allows traders to hold positions indefinitely. By introducing a perpetual swaps exchange specifically for Bitcoin, Velar aims to provide enhanced trading opportunities and liquidity for Bitcoin traders in the DeFi space.

5uHfSyjCti7s1nH4OXfpjAloJoU2gCdewViTlTaCl 1

Bitcoin DeFi

Decentralized Finance, or DeFi, refers to the use of blockchain technology and smart contracts to recreate traditional financial instruments, such as lending, borrowing, and trading, in a decentralized manner. While DeFi has gained significant traction in the Ethereum ecosystem, it is still in its early stages for Bitcoin. Velar seeks to bring the benefits of DeFi to the Bitcoin network by leveraging developments in side chains and Layer-2 solutions, which enable smart contract capabilities on Bitcoin.

Raising $3.5M

Velar has successfully raised $3.5 million in a funding round to support its mission of developing DeFi tools for the Bitcoin ecosystem. The funding will be used to further enhance Velar’s technological infrastructure and accelerate the development and launch of their perpetual swaps exchange. The funding round saw participation from prominent investors in the crypto space, including Bitcoin Startup Lab, CMS Holdings, Black Edge Capital, GBV, Cypher Capital, Trust Machines SPV, Transform Capital, Maple Block, and Samara Asset Group.

Background

Bitcoin DeFi Still Nascent

While DeFi has gained significant traction in the Ethereum ecosystem, the same cannot be said for Bitcoin. The Bitcoin network has traditionally been limited in terms of its smart contract capabilities, which are essential for DeFi applications. As a result, Bitcoin DeFi is still in its early stages and has yet to see widespread adoption. However, recent developments in side chains and Layer-2 solutions are beginning to pave the way for DeFi on the Bitcoin network.

Slow Infrastructure

One of the main challenges hindering Bitcoin DeFi’s growth is the slow infrastructure. Bitcoin’s block times, which determine the time it takes to confirm transactions, are currently set at 10 minutes. This slow confirmation time is not ideal for settling trades and transactions in a fast-paced trading environment. However, with the introduction of side chains and Layer-2 solutions, such as the upcoming Nakamoto Release by Stacks, this issue is being addressed.

Hesitancy Among Bitcoin Holders

Another obstacle for Bitcoin DeFi is the hesitancy among Bitcoin holders to participate in newfangled ways of leveraging their assets. Many holders of Bitcoin are conservative in their approach and may be reluctant to explore DeFi due to concerns around security and the unfamiliarity of the technology. However, as the benefits of Bitcoin DeFi become more apparent and user-friendly solutions emerge, it is expected that this hesitancy will diminish.

Velar’s Plans

Decentralized Finance Tools for Bitcoin

Velar’s overarching goal is to develop a suite of decentralized finance tools specifically designed for the Bitcoin ecosystem. By leveraging advancements in side chains and Layer-2 solutions, Velar aims to bring the benefits of DeFi to Bitcoin users. These tools will enable users to access lending, borrowing, and trading services in a decentralized manner, enhancing the overall utility and value of Bitcoin.

Launch of Perpetual Swaps Exchange

One of Velar’s key initiatives is the launch of a perpetual swaps exchange for Bitcoin. This exchange will allow users to trade perpetual swaps, a type of derivative contract, with leverage using their Bitcoin holdings. By providing this trading platform, Velar aims to increase liquidity in the Bitcoin DeFi space and offer enhanced trading opportunities to Bitcoin traders.

Utilizing Bitcoin Network

Velar intends to build its DeFi tools and perpetual swaps exchange on the Bitcoin network. Unlike Ethereum, which is the dominant blockchain for DeFi, Bitcoin has been historically limited in its smart contract capabilities. However, with the development of side chains and Layer-2 solutions, Bitcoin’s potential for DeFi is being unlocked. Velar aims to leverage these developments to create a secure and robust DeFi ecosystem that is built on Bitcoin.

Importance of Stacks’ Nakamoto Release

Velar is particularly interested in the upcoming Nakamoto Release by Stacks, a blockchain platform that enables the creation of smart contracts on Bitcoin. The Nakamoto Release will introduce sBTC, a synthetic bitcoin asset that is pegged to the value of BTC. This will allow Bitcoin holders to unlock the value of their holdings without relinquishing custody. Velar plans to incorporate sBTC into its trading platform to provide users with more flexibility and trading options.

Introduction of sBTC

sBTC is a synthetic bitcoin asset that will be introduced as part of Stacks’ Nakamoto Release. It is designed to represent the value of BTC in the DeFi ecosystem. With sBTC, Bitcoin holders will be able to access DeFi services, such as lending and borrowing, without having to sell their BTC holdings. Velar plans to integrate sBTC into its perpetual swaps exchange, enabling users to trade with leverage and utilize their BTC as collateral.

Enhanced Trading Opportunities

Velar’s perpetual swaps exchange will provide traders with enhanced trading opportunities and increased liquidity in the Bitcoin DeFi market. By allowing traders to use their Bitcoin holdings as collateral and trade with leverage, Velar aims to attract more participants to the Bitcoin DeFi space. This increase in trading activity and liquidity will contribute to the growth and maturation of the Bitcoin DeFi ecosystem.

Funding and Investors

Amount Raised: $3.5M

Velar has successfully raised $3.5 million in a funding round to support its mission of developing DeFi tools for the Bitcoin ecosystem. This funding will enable Velar to accelerate its development plans and enhance its technological infrastructure. The amount raised demonstrates investor confidence in the potential of Bitcoin DeFi and Velar’s ability to address the challenges in this nascent space.

Participating Investors

Prominent investors in the crypto space participated in Velar’s funding round. These investors include Bitcoin Startup Lab, CMS Holdings, Black Edge Capital, GBV, Cypher Capital, Trust Machines SPV, Transform Capital, Maple Block, and Samara Asset Group. The participation of these investors further validates Velar’s vision and positions them to benefit from the growth of the Bitcoin DeFi market.

22ExZ1O1hDYjZVFRw2iLpg54DdS1nStHAMZLHr5ip

Challenges in Bitcoin DeFi

Infrastructure Limitations

Bitcoin DeFi faces infrastructure limitations that have hindered its growth. Bitcoin’s slow block times and limited smart contract capabilities have made it challenging to facilitate fast and efficient DeFi transactions. However, with the development of side chains and Layer-2 solutions, these infrastructure limitations are being addressed, opening up new possibilities for Bitcoin DeFi.

Concerns Among Bitcoin Holders

Bitcoin holders have expressed concerns about participating in DeFi due to security and unfamiliarity with the technology. The conservative nature of many Bitcoin holders has contributed to the slow adoption of Bitcoin DeFi. However, as user-friendly solutions emerge and the benefits of Bitcoin DeFi become more apparent, it is expected that these concerns will diminish.

Conclusion

Progress Made in Bitcoin DeFi

Although Bitcoin DeFi is still in its nascent stages, progress has been made in addressing the challenges and limitations. With the development of side chains, Layer-2 solutions, and upcoming releases like Stacks’ Nakamoto Release, the infrastructure for Bitcoin DeFi is improving. Furthermore, the successful funding round of Velar demonstrates growing investor interest and confidence in the potential of Bitcoin DeFi.

Potential Impact on the Industry

The development of a robust Bitcoin DeFi ecosystem has the potential to revolutionize the financial industry. Bitcoin’s widespread adoption and market dominance make it a powerful force in the DeFi space. By unlocking the value of Bitcoin and enabling users to access decentralized financial services, Bitcoin DeFi has the potential to provide financial inclusion, enhance liquidity, and offer new opportunities for participants in the industry.

About Velar

Crypto Startup Velar

Velar is a crypto startup dedicated to developing decentralized finance tools for the Bitcoin ecosystem. The company aims to address the nascent state of Bitcoin DeFi by leveraging advancements in side chains and Layer-2 solutions to enable smart contract capabilities on the Bitcoin network. By doing so, Velar aims to enhance the utility and value of Bitcoin for users, bridging the gap between traditional finance and the emerging blockchain industry.

Mission and Vision

Velar’s mission is to empower individuals by providing them with access to decentralized financial services on the Bitcoin network. By building a suite of DeFi tools and a perpetual swaps exchange, Velar seeks to make it easier for individuals to leverage their Bitcoin holdings and participate in the growing DeFi market. Velar envisions a future where individuals have full control and ownership of their financial assets, free from the constraints of traditional financial intermediaries.

About Bitcoin DeFi

Introduction to Bitcoin DeFi

Bitcoin DeFi refers to the use of decentralized finance applications and smart contracts on the Bitcoin network. While Ethereum has been the dominant platform for DeFi, recent developments in side chains and Layer-2 solutions have expanded the possibilities for DeFi on Bitcoin. Bitcoin DeFi aims to provide users with access to decentralized financial services, such as lending, borrowing, and trading, using Bitcoin as the underlying asset.

Current Challenges and Limitations

Bitcoin DeFi faces several challenges and limitations that have hindered its growth. The slow block times and limited smart contract capabilities of the Bitcoin network have made it challenging to facilitate timely and efficient DeFi transactions. However, advancements in side chains and Layer-2 solutions are addressing these limitations by enabling smart contract capabilities on Bitcoin. Additionally, concerns around security and hesitancy among Bitcoin holders have slowed the adoption of Bitcoin DeFi.

About Stacks

Overview of Stacks

Stacks is a blockchain platform that enables the creation of smart contracts on the Bitcoin network. By utilizing side chains and Layer-2 solutions, Stacks allows developers to build decentralized applications and bring smart contract capabilities to Bitcoin. Stacks aims to enhance the functionality and utility of Bitcoin by providing developers with the tools they need to create innovative applications and solutions.

Nakamoto Release and Its Significance

The Nakamoto Release is an upcoming upgrade to Stacks’ blockchain platform. This release will introduce sBTC, a synthetic bitcoin asset that is pegged to the value of BTC, enabling Bitcoin holders to access DeFi services without giving up custody of their BTC. The Nakamoto Release is a significant development for Bitcoin DeFi as it opens up new possibilities for leveraging Bitcoin in decentralized finance applications.

About the Funding Round

Participating Investors

Velar’s funding round saw participation from several prominent investors in the crypto space. Bitcoin Startup Lab, CMS Holdings, Black Edge Capital, GBV, Cypher Capital, Trust Machines SPV, Transform Capital, Maple Block, and Samara Asset Group all joined the funding round. The involvement of these investors demonstrates their confidence in Velar’s vision and the potential of Bitcoin DeFi.

Implications for Velar’s Growth

The $3.5 million raised in the funding round will support Velar’s development plans and enhance its technological infrastructure. The funding will enable Velar to accelerate the launch of its perpetual swaps exchange and further develop its suite of DeFi tools. With strong investor support, Velar is well-positioned for growth and to make a significant impact in the Bitcoin DeFi space.

RELATED POSTS

View all

view all

Discover more from StockCoin

Subscribe now to keep reading and get access to the full archive.

Continue reading