Wasabi, a pioneering memecoin and NFT leverage trading protocol, has successfully raised $3 million in a seed funding round led by Electric Capital. This significant investment marks a crucial milestone for Wasabi as it seeks to broaden its team and refine its platform.

The funding round also attracted investments from a diverse group of backers, including Alliance, Memeland, Spencer Ventures, Pudgy Penguins CEO Luca Netz, Magic Eden co-founder Zhouxun Yin, renowned angel investor Santiago Santos, and notable Crypto Twitter personalities Cygaar, Zagabond, DCF God, and Bob Loukas, according to an announcement made by Wasabi on Monday.

Co-founder Eren Derman shared that the seed round began in early January and concluded at the end of February. However, Derman opted not to disclose specific details regarding the round's structure and valuation.

Understanding Wasabi

Wasabi operates as a decentralized finance (DeFi) protocol, enabling users to trade "long tail assets" such as memecoins and NFTs with leverage. Derman highlighted the lack of financial infrastructure for these niche assets, which prompted the creation of Wasabi to facilitate efficient price discovery.

Through Wasabi, users can engage in long, short, and staking positions on memecoins and NFTs. The protocol offers leverage ranging from 2-3x for more exotic, lower liquidity assets, while flagship assets like ETH and USDB can leverage up to 10x.

Wasabi distinguishes itself by claiming to be the first protocol to enable leveraged trading backed by actual assets. "Wasabi offers on-chain perpetual futures, meaning all trades are asset-backed, eliminating counterparty risk," explained Derman. This approach contrasts with conventional decentralized exchanges like Aevo and Hyperliquid, which rely on market makers to maintain synthetic price feeds pegged to actual on-chain asset prices.

Currently, Wasabi is available on Ethereum and Blast, an Ethereum Layer 2 solution, with the majority of user activity occurring on Blast. The protocol has provided liquidity for projects such as Pacmoon, Blastopians, and Juice Finance.

Initially, Wasabi launched its options and perpetual futures products on Ethereum before introducing perpetual futures on Blast. Since January, over 18,000 traders have used Wasabi, generating more than $500 million in trading volume. The protocol now boasts a total value locked (TVL) of over $111 million with more than 66,000 liquidity providers.

Future Plans

With the new funding secured, Wasabi plans to expand its team from six to ten members in the near future. Derman announced that the project is actively hiring for several positions, including a smart contract engineer, back-end developer, quantitative engineer, and head of operations.

This strategic expansion aims to bolster Wasabi's development capabilities and enhance its platform, positioning the protocol for continued growth and innovation in the rapidly evolving DeFi landscape.