Variational, a peer-to-peer on-chain derivatives trading protocol, said it raised $50 million in a funding round led by global investment fund Dragonfy and with participation from Bain Capital Crypto and Coinbase Ventures, among others.
The funds will be used to expand the Cayman Islands-based company’s derivatives trading services, the company said in a statement on Thursday. The funding comes as Variational launches perpetual futures tied to real-world assets (RWA) such as gold, silver, copper and West Texas Intermediate (WTI) crude oil.
“We believe RWA perpetual contracts will soon become the largest contract category in decentralized finance (DeFi), larger than Bitcoin and Ethereum combined,” Variational CEO and co-founder Lucas V. Schuermann told CoinDesk.
Bitcoin The largest cryptocurrency with a market capitalization of $1.6 trillion. Ethereum (ETH) is the second largest currency, worth $256 billion. Together they account for almost 68% of the total cryptocurrency market capitalization.
Variational said the company has traded more than $200 billion in volume since its founding in 2025, and the new funding will allow it to build the infrastructure needed to channel liquidity directly from traditional markets in the coming months. The company says its model is uniquely designed to aggregate and channel liquidity from traditional and on-chain markets, avoiding the need to build from scratch on siled marginal order books.
“Our Series A round secures the capital and partners we need to bring in [traditional finance] By aggregating liquidity from source, it increases TradFi-level depth to over 100 on-chain perpetual assets, rather than rebuilding thin order books for each new listing,” said Schuermann.
Dragonfly’s investment comes two months after announcing a $650 million funding round, one of the largest in the industry at a time when many blockchain-focused venture capital firms are struggling, managing partner Haseeb Qureshi said.
In a message to CoinDesk, Qureshi detailed the market structure issues that prompted his company to invest.
“Most DeFi exchanges are trying to bootstrap liquidity for every asset from scratch, and it shows,” Qureshi said. “Outside of the top ten traded assets, the market is dangerously thin.”
Qureshi said TradFi solved this cold-start liquidity problem decades ago by using a request-for-quote (RFQ) system, in which traders quote on demand and hedge in real-time on deep underlying markets like CME or NYSE.
“This is exactly what Variational does, but on-chain,” Qureshi said, noting that the architecture features smart contract margining, stablecoin settlement and permissionless access to institutional depth.
“RWA perpetual contracts will become the largest contract category in crypto within a year, larger than BTC and ETH perpetual contracts combined. The winning platform will not look like a traditional exchange. We are proud to support Variational,” he said.
Update (May 21, 19:00 UTC): Added comment from Dragonfly’s Haseeb Qureshi.
