Lyra, a decentralized finance (DeFi) platform dealing in options trading and built on Ethereum scaling network Optimism, has raised $3.3 million in a seed funding round led by Framework ventures and ParaFi capital. Other participants included: Apollo Capital, the DeFi Alliance, Divergence, Orthogonal, and Robot Ventures. Lyra Receives $3.3 Million in Seed Funding On 26 July, Lyra announced that it had successfully raised funds from some of DeFi’s leading backers. The protocol, which launched its testnet less than a month ago, is scheduled for a public launch in September. With DeFi’s popularity on the rise, demand for products and services resembling those seen in traditional finance is increasing. Derivatives have specifically attracted attention during this time, but the options market has struggled for a similar response. “Options protocols have struggled to offer competitive pricing and liquidity. This is because it’s too expensive to manage risk on layer 1, which is essential when trading options,” Lyra’s co-founder Michael Spain noted. “By designing for layer 2, Lyra’s mechanism is able to actively manage risk, providing confidence to liquidity providers and enabling affordable pricing for traders.” Lyra comes integrated with Synthetix, a derivatives trading protocol that also leverages Optimism. The collaboration with Synthetix allows the platform to hedge risk for liquidity providers with automatic trading. This helps Lyra maintain low fees for traders. Speaking on Synthetix’s contribution to the protocol, Michael Anderson, co-founder of Framework Ventures said, “By leveraging layer 2 scalability with Synthetix composability, Lyra enables a truly permissionless risk-managed options marketplace for DeFi traders and liquidity providers.” Lyra to Ramp Up Hiring and Expansion of Engineering Team According to Lyra’s statement, proceeds from the funding will be used to expand the company’s team of engineers and ramp up hiring in other areas. Meanwhile, its investors are hoping that Lyra’s powerful combination of technologies and pricing can provide a much-needed boost to DeFi options trading. Santiago Roel Santos, a partner at ParaFi Capital, thinks that options trading is a “core missing piece” in the existing decentralized finance space. He stated that “Lyra’s novel on-chain pricing mechanism, Synthetix integration, and deployment on Optimism will introduce traders and liquidity providers to a scalable and capital-efficient options protocol.”
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