VeradiVerdict - Issue #255
We’re in the midst of a paradigm shift from centralized to decentralized finance. Vega is Web3’s native derivatives layer, designed to lead that process for the derivatives market. Vega is an app-specific, proof-of-stake blockchain purpose built for high-throughput derivatives trading at a scale competitive with centralized alternatives. The network is entirely community-owned and operated, ensuring true decentralization from the moment of launch. Because Vega is an app-specific chain, it can easily extend to different hubs down the line, allowing for wider distribution to new chains and new forms of liquidity as it scales.
Derivatives are a critical component of an efficient global financial market, with the total value of derivatives in global markets often estimated to be more than $1 quadrillion. By offering a permissionless DEX and trading platform for the open, fair, and secure trading of derivatives on crypto and other underlyings, Vega first aims to disrupt the growing crypto derivatives markets — which eclipsed $2 trillion in monthly trading volume in January 2023 — with the end goal of bridging the gap between real world derivatives and crypto derivatives as the ecosystem of wallets, stablecoins, and on-ramps matures and becomes more widely available.
Key features of Vega’s platform. Source: Vega
With gas-free trading, community created and managed cash-settled markets, and built-in liquidity incentives that automatically match market makers and traders, Vega is seeking to scale the future of derivatives. All in all, it is the team’s dedication to permissionless markets that fuels all of its efforts.
Vega’s console. Source: Vega
Vega’s Alpha Mainnet launched in early May, and users began trading on May 23rd after a community governance process to switch on the trading functionality and deploy the first markets.
Users can now trade (without gas fees) on a decentralized DEX with a full orderbook (CLOB).
Market makers can allocate liquidity to existing markets in a live environment to kickstart trading and earn a portion of trading fees.
The community has already created 3 markets, with more expected in the coming weeks and months. Anyone with enough tokens can propose new markets on-chain, which will automatically be created once enough liquidity is committed if the vote is successful.
Prior to its mainnet launch, the platform was stress tested by MMs and traders through Mainnet Simulations, where a total of $5bn testnet xDAI and USDC in volume was traded, generating the equivalent of over $10MM in testnet xDAI and USDC in market fees.
Mainnet Sims demonstrated the material value that would be realized and allocated to market makers if participants were operating with real assets.
Vega Markets. Source: Vega
Vega Protocol was co-founded by Barney Mannerings and Ramsey Khoury. Barney was previously manager at Accenture, principal consultant at Capco, and founder at Pik. Ramsey previously co-founded Chainspace and Head London. Both have experience as successful founders and together bring their combined technical and business expertise to Vega. Wayne Almeida also joined as COO, bringing experience in the finance industry, including as a director Fiduciary Management Limited and as Senior Company Administrator at Line Group Limited. The founders have built up a team of 50+ individuals across engineering, design, business development, and more. Barney said in a recent interview that the team is primarily focused on demonstrating that Vega can work well in the live alpha mainnet and ensuring Vega’s robustness and security.
Pantera is proud to be an early supporter of Vega, having led their $5M seed round in 2019. Vega stands at the precipice of the transition from centralized to decentralized finance and has already proved its capability in simulated testnets. We’re excited to see Vega continue to have a great impact on the DeFi space and democratize access to new permissionless primitives.
- Paul Veradittakit
Pantera Capital Puerto Rico Management, LP and its affiliates (“Pantera”) makes investments in crypto assets and in blockchain-related companies. Pantera and/or its affiliates or personnel may be an investor in, or have relationships or other business arrangements related to, certain instruments, companies and/or projects discussed herein. This document does not contain any advertisement for Pantera’s investment advisory services, or any other services or products, whether provided by Pantera or otherwise. The information and opinions presented in this document are solely those of Paul Veradittakit; they do not represent, and should not be interpreted as representative of, the views of Pantera or any other individual working for Pantera, and do not represent investment, legal, tax, financial, or any other form of, advice or recommendations. Neither Pantera nor Mr. Veradittakit is acting, or purports to act, as an investment adviser or in a fiduciary capacity with respect to any recipient of this paper. Information contained in this document is believed to be reliable, but no representation is made regarding such information’s fairness, correctness, accuracy, reasonableness or completeness. There is no obligation to update this document or to otherwise notify a reader if any matter stated statement or information contained here changes or subsequently is shown to be inaccurate. Nothing contained herein constitutes any representation or warranty as to future performance of any financial instrument or company. Forward-looking statements should not be relied upon, and performance or outcomes may differ materially from what is contemplated herein. Opinions included here incorporate subjective judgments or may be based on incomplete information. This document does not constitute or contain an offer to sell or a solicitation to buy any securities or a recommendation to enter into any transaction, and no reliance should be placed on this document in making investment decisions.
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Hi, I’m Paul Veradittakit, a Managing Partner at Pantera Capital, one of the oldest and largest institutional investors focused on investing in blockchain companies and cryptocurrencies. I’ve been in the industry since 2014, and the firm invests in equity, early stage token projects, and liquid cryptocurrencies on exchanges. I focus on early-stage investments and share my thoughts on what’s going on in the industry in this weekly newsletter.