Krypton, a decentralized exchange (DEX) that aims to help traders achieve best trade execution on crypto trades, has raised $7 million in a seed round led by Framework Ventures, a venture capital firm known for its early entry into Web3 and decentralized finance (DeFi). The raise also garnered support from a number of other notable investors including Samsung Next, HashKey Capital, Finality Capital Partners, Foresight Ventures, GSR, and MEXC.
Krypton won the DeFi category in the Chainlink Fall 2021 Hackathon with a stated goal of being the world’s first exchange that fully protects market participants from predatory trading and cost inefficiency. Unlike existing decentralized exchanges, which are typically powered by Automated Market Makers (AMM), Krypton is a novel take on the age-old order book concept with a unique matching engine. The mechanism features a continuous batch auction for price discovery, which reduces slippage and provides comprehensive protection against Maximal Extractable Value (MEV) and impermanent loss, which has cost traders well over $650 million since 2020.
By providing better trade execution through an intuitive user experience, Krypton seeks to play a vital role in furthering the adoption of decentralized finance.
“Despite growing interest in cryptocurrencies, DeFi trading volume has remained fairly stagnant over the last year, even before the crash. In our view this is primarily due to extreme inefficiency of trading in DeFi, something that institutions in particular are very sensitive to,” says Michael Nowotny, Co-Founder and CEO of Krypton and a former professor of mathematical finance at Boston University. “By utilizing Chainlink technology, Krypton enables a new world of trading efficiency that fosters broad-based adoption of DeFi as the global standard.”
To power its sophisticated trade matching engine, Krypton leverages the significant computational power of Chainlink’s Decentralized Oracle Network (DON). The “Krypton Compute” mechanism makes it possible to take complicated computations off-chain, lowering costs for traders and providing a novel source of fees for Chainlink node operators. Krypton also seeks to further advance DeFi trading as a partner protocol on Chainlink’s Cross-Chain Interoperability Protocol (CCIP), an open source standard for cross-chain communication to enable faster and more efficient transactions for trading.
“We see Krypton as a platform for an entirely new format of crypto trading that could reach completely new institutional and retail user demographics” said Michael Anderson, Co-founder of Framework Ventures. “For DeFi to mature, best execution needs to be a priority, and we think Krypton’s solution will play a major role in this transformation.”
The funds from the seed round will be utilized to launch the Krypton exchange in Q1 of 2023 with investments in the engineering team, research team, and marketing and community development.
“We’re excited to support Krypton through the Startup with Chainlink program in their goal of increasing the efficiency of decentralized exchanges and reducing the harmful effects of MEV, helping scaling DeFi to a global level. As a Chainlink Hackathon winner and future user of CCIP, Krypton is a prime example of how oracle-enabled smart contracts can provide real value within the growing Web3 ecosystem,” stated Johann Eid, VP of go-to-market at Chainlink Labs.
Krypton is dedicated to the idea that functional markets are fair markets, where you can get the trade you want at a cost that makes sense. Our academic roots are the foundation of our novel approach to solving the challenges of building a decentralized financial system, and we’re proud to offer a truly novel approach to exchange architecture with the Krypton DEX. Join our Telegram community or follow us on Twitter for more information about our upcoming release and to contribute to our lively intellectual discussions about DeFi.