Dec 8, 2021
Voltz, the Interest Rate Swap AMM, Announces it’s $6m Seed Round Led by Framework Ventures
Voltz is excited to announce its $6m Seed round, led by Framework Ventures, to bring Interest Rate Swaps to DeFi through a novel Automated Market Maker (AMM) that is up to 3,000 times more capital efficient than alternative models.
The round also saw participation from Fabric Ventures, Coinbase Ventures, Amber Group, Wintermute, Robot Ventures, Mgnr, Entrepreneur First, Backed and NEMO (the friendly apes behind DegenScore). In addition to an exciting group of angels including Stani of Aave, Kain of Synthetix, David and Ryan of Bankless, Julian Koh of Ribbon, Alan Howard Family Office and many more.
As it currently stands, attempts to use automated market makers (AMMs) as mechanisms to bring fixed rates to DeFi have been wide ranging with varied success, in part due to silos they create between variable and fixed-rate assets. Additionally, lend and borrow rates for DeFi protocols can be highly volatile ranging from 2% to over 40%, as shown below. To address these limitations, Voltz has created the first-ever synthetic interest rate swap AMM that’s highly capital efficient, removes silos between fixed and variable rates, and allows users to trade with >10x leverage.
Uniquely, Voltz leverages a concentrated liquidity virtual AMM (vAMM) for price discovery — unlike traditional AMMs, where assets are moved into a liquidity pool, Voltz utilizes the vAMM for price discovery only while the management of the underlying assets is completed outside the vAMM via the Margin Engine. The Margin Engine effectively defines the leverage available to traders and liquidity providers and manages the collateralization of the protocol. The combined impact of these modules results in 3,000x greater capital efficiency than alternative interest rate swap models while also giving liquidity providers and traders significant control over their positions.
“In creating Voltz, we took a research-focused approach to address the limitations of existing AMM structures and identified a macro opportunity for the use of interest rate swaps through a new AMM design that utilizes concentrated liquidity,” said Simon Jones, CEO of Voltz Labs.
“Interest rate swaps are a key pillar of any financial system, so by bringing IRS to DeFi we want to help accelerate the wider effort of DeFi as a whole in continuing to displace traditional financial markets. As this happens, Voltz has the unique opportunity to displace trillions of dollars of trading volume that’s exchanged each year in TradFi IRS markets.”
Voltz Labs already has a number of rockstars in their team, with more announcements coming soon. That said, the funds raised will continue to support the growth of the Voltz Labs team (open roles here), in addition to progressing product development. Users can expect Voltz to launch on an Ethereum testnet in Q1 2022.
“The IRS market will act as a catalyst for a new wave of products in DeFi and Voltz is operating at the forefront of this intersection,” said Vance Spencer, co-founder of Framework Ventures. “Voltz’s unique model will transform trading strategies that can be developed while also being highly capital efficient — two components that will be extremely beneficial for the entire ecosystem.”
To learn more about Voltz and its upcoming developments visit voltz.xyz or join the community action through Twitter, Discord and Telegram. You can also check out the Voltz Litepaper, released for the first time today, for more information on the protocol design.
LFG Voltz Fam 🚀
About Voltz
Voltz is a noncustodial automated market maker for Interest Rate Swaps (IRS). The protocol uses a concentrated liquidity virtual AMM (vAMM) for price discovery only, with the management of the underlying assets performed by the Margin Engine. The combined impact of these modules means counterparties can create and trade fixed and variable rates through a mechanism that is up to 3,000x more capital efficient than alternative interest rate swap models. To learn more visit: voltz.xyz
About Framework Ventures
Framework Ventures is a team of technologists, researchers and investors who buy assets of, who build for, and who participate in open crypto networks. At its core, Framework is a technology company, building products and services to support the open blockchain networks that they invest in. The firm has backed dozens of notable companies in the decentralized finance and Web3 space, including Synthetix and Chainlink. To learn more visit: framework.ventures.
