Ellipsis Labs has secured $20 million in Series A funding, led by Paradigm and joined by Electric Capital. The company’s flagship product, the decentralized exchange Phoenix, was launched in February 2023, with its user interface released publicly last August. The funding will expedite its mission to establish a novel financial ecosystem offering competitive financial products on robust blockchains, melding the accessibility and transparency of DeFi with the efficiency of traditional markets.
A decentralized exchange functions as a peer-to-peer marketplace where crypto traders execute transactions directly, bypassing intermediary custodians. However, these platforms currently lack the liquidity to compete with centralized counterparts such as Coinbase, Binance, or Kraken.
Phoenix, ranked as the fifth-largest decentralized exchange by trading volume in the past 24 hours according to DefiLlama data, facilitates hundreds of millions of dollars in daily trading volume. Its on-chain limit order book enables market makers to vie for liquidity quality.
Co-founded by Eugene Chen and Jarry Xiao, who met in middle school and pursued careers in high-frequency trading, Ellipsis Labs launched Phoenix to address liquidity challenges in DeFi. Unlike many automated market makers (AMMs) that rely on external incentives, Phoenix aims to attract liquidity through its intrinsic opportunities, prioritizing sustainability over short-term gains.
The funding, secured earlier this year, will bolster the engineering team and advance the innovation of on-chain financial primitives. Built atop Solana blockchain for its high throughput and low fees, Phoenix optimizes liquidity provision by minimizing gas fees incurred with each transaction.
Matt Huang, co-founder and managing partner of Paradigm, expressed excitement about partnering with Ellipsis Labs, emphasizing their reputation as ambitious and principled builders in the DeFi space.