The CIO of the Alan Howard-backed hedge fund said a liquid options market is the next step in decentralized crypto trading.
Crypto derivatives firm Hxro (pronounced “hero”) has raised $15 million in a token sale from hedge fund manager Commonwealth Asset Management.
The investment is the largest single investor fundraiser the firm has had to date. It comes in the wake of Hrxo Network, a decentralized protocol built on Solana that offers permissionless access to liquidity on options markets.
Commonwealth is a global macro and real estate-focused hedge fund that includes veteran investors such as Louis Bacon and Alan Howard. Commonwealth Chief Investment Officer Adam Fisher said the fund chose to invest because of Hxro’s plans to generate liquidity and a stronger market structure in the decentralized options market.
“When volatility expands and the liquidity backs away, market participants who need to adjust their position are pretty much unable to do something,” said Dan Gunsberg, co-founder and CEO of Hxro, adding:
“It’s one thing to get large retail players into the market, but for macro funds or large hedge funds the need to hedge and the need to take position in options is greater than ever.”
The Hxro Network will offer increased liquidity because it will offer both an automated market maker like many other decentralized finance (DeFi) protocols and allow traditional market makers into the network as well, Gunsberg said. The traditional desks are primarily options-focused proprietary trading firms such as the Chicago Trading Company, he added.
Hxro started out with a gamified binary futures product called MoonRekt. Since the company’s inception Hxro founders Gunsberg and Rob Levy have relied on their prior careers as traders in traditional markets to design novel products for crypto traders.