Rails Raises $6.2M to Launch Hybrid Crypto Exchange
In the wake of FTX’s collapse in 2022, a new player has emerged in the crypto exchange landscape. Rails, a decentralized crypto exchange, has secured $6.2 million in funding to bridge the gap between centralized and decentralized trading platforms. The startup, co-founded by Satraj Bambra, Megha Bambra, and former Grindr COO Rick Marini, aims to provide a secure and user-friendly trading experience for institutional clients and high-net-worth investors.
Filling the Void Left by FTX
The crypto community has been eagerly awaiting a solution to the void left by FTX, particularly in the realm of crypto derivatives and perpetual futures trading. Rails seeks to address this gap by offering a platform that prioritizes customer deposit safety and caters to the needs of institutions seeking exposure to these markets.
There’s a big gap, especially on the perpetual [futures] side with how institutions like to have exposure.
Satraj Bambra, CEO of Rails, emphasized the demand from hedge funds looking to trade crypto but lacking a suitable avenue. By focusing on perpetual futures contracts, which mirror the spot price of cryptocurrencies through stablecoins like USDC, Rails aims to provide a risk-managed approach to trading.
Hybrid Approach: Centralized Computing and Decentralized Custody
Rails distinguishes itself by adopting a hybrid approach, combining the benefits of centralized computing with decentralized custody. This unique combination allows for efficient risk management and fast order executions while ensuring that users maintain full control over their funds through self-custody.
It’s a marriage between central computing and decentralized custody.
By leveraging smart contracts and blockchain technology, Rails provides automatic visuals into the exchange’s operations and fund management. This transparency aims to instill trust in users, especially in light of the issues faced by FTX regarding the misuse of customer deposits.
Regulatory Compliance and Expansion Plans
Rails is currently in the early stages of launching its offshore service in select crypto-friendly countries, excluding the U.S. The startup is working on expanding its licensing and regulatory strategy to ensure full compliance. While the specific jurisdictions have not been disclosed, Rails is committed to onboarding capital from friendly jurisdictions.
Looking ahead, Rails plans to focus on enhancing its product offerings, including social functions, leaderboard capabilities, and partnerships with industry players. The startup emphasizes its product-centric approach, aiming to provide a seamless and educational user experience for both novice and experienced crypto traders.
Funding and Future Outlook
The $6.2 million funding round was led by Slow Ventures, with participation from CMCC Global, Round13 Capital, and Quantstamp. The capital will be used to hire engineering talent and expand the startup’s licensing and regulatory efforts. Rails has already onboarded over $10 million in capital privately and plans to open its exchange to the public in September or Q4 of this year, following a select beta testing period in May.
As the crypto industry continues to evolve, Rails aims to establish itself as a trusted and innovative player in the exchange landscape. By bridging the gap between centralized and decentralized trading, the startup seeks to attract both institutional and individual investors looking for a secure and user-friendly platform to trade crypto derivatives.
2 Comments
Oh, the crypto world strikes again, when will they learn
Rails rockets ahead with a hefty $6.2M, aiming to outshine FTX with its decentralized twist!