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Decentralised finance: Swaap Finance raises €4.1 million

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Tuesday, April 18, 2023

The French protocol, which specialises in decentralised finance, is backed by several European funds, including Germany's Signature Ventures and France's Kima Ventures.

This is the whole paradox of the "Bear Market". While some Web3 start-ups are struggling to attract investors (read our survey), others, like Swaap Finance, are having no trouble raising funds. The French start-up specialising in decentralised finance (DeFi) has just raised €4.1 million ($4.5 million).

A number of funds took part in the round. German Signature Ventures (known for its investments in deep tech crypto), Franco-American Newfund specialising in DeFi, as well as Asian fund C2 Ventures positioned in DeFi and gaming. Kima Ventures, Xavier Niel's fund, is also on board.

"We are proud to have brought together the three main geographies of the crypto industry," explains co-founder Cyrille Pastour. "We now have all the weapons we need to get through this complicated period and grow."

Several business angels have also chipped in:

Pascal Gauthier (Ledger), Jean-Marie Mognetti (CoinShares), Alexandre Stachtchenko (KPMG), Claire Balva (ex-KPMG) and Julien Bouteloup (Stake Capital). All have invested in shares, as Swaap does not (yet) have a token.

A transparent market maker

Swaap Finance is one of a number of projects aiming to improve the financial system. According to its creators, decentralised finance (DeFi), the principle of which is to reduce the number of financial intermediaries, would be a "fairer, more efficient and more secure" infrastructure.

Swaap is what is known as a market maker, i.e. a player that acts as a link between buyers and sellers of securities (shares, bonds) on the markets. Except that unlike traditional and even Web3 players, Swaap is not reserved exclusively for heavyweight market players.

"Anyone can contribute liquidity to Swaap Finance", says Cyrille Pastour, who also stresses that the project does not keep users' cryptos (non-custodial).

These arguments are finding resonance after the Three Arrows Capital or Alameda scandals. These crypto funds had made ultra-speculative bets with the money entrusted to them.

Swaap also challenges existing decentralised models, such as Uniswap, by eliminating what is known as "impermanent loss". This phenomenon occurs when a liquidity provider suffers the volatility of a pair of tokens that it has placed in a liquidity pool.

"It's similar to playing roulette because you have a negative expectation of gain on average, meaning that you can win a lot of money but there is a greater probability of losing some," insists Cyrille Pastour. "This does not constitute a serious investment product for a liquidity provider", he continues.

According to the team, Swaap's investment strategies are profitable and their returns correspond to their level of risk.

In 9 months, the service has attracted more than 2,000 liquidity "providers" and an immobilised value of $2 million. With its new version coming soon, as well as new funding, Swaap hopes to support more tokens and offer more aggressive strategies.

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Cette analyse n'est pas un conseil en investissement. Elle a été rédigée sans prendre en compte votre situation personnelle et notamment votre situation financière, votre profil de risque et vos objectifs d’investissement.

Avant d’investir dans un produit, l’investisseur doit comprendre entièrement les risques et consulter ses propres conseillers juridiques, fiscaux, financiers et comptables.

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