Convergence RFQ, an upcoming trading platform based on Solana, has secured $2.5 million in a pre-seed funding round. The funding round was led by C² Ventures and included participation from notable entities such as Big Brain Holdings, Israel Blockchain Association, Auros Global, among others, according to an announcement by Convergence RFQ.
The startup initiated its pre-seed fundraising efforts midway through the previous year and successfully concluded it in June of this year, as revealed by co-founder Uwe Cerron. This funding round took the form of a simple agreement for a future token round, with a fully diluted valuation of $30 million, as per Cerron.
Convergence RFQ has designated the ticker symbol “CVG” for its governance token.
Understanding Convergence RFQ
Convergence RFQ stands as an on-chain cryptocurrency trading platform, capable of supporting both spot and derivatives trading.
The abbreviation RFQ, which stands for “request for quote,” represents a unique approach wherein buyers request price quotations from sellers. This method distinguishes itself from the conventional central limit order book (CLOB) mechanism utilized by centralized exchanges and the automated market maker (AMM) system employed by decentralized exchanges. In a CLOB, buyers and sellers place orders at specific price levels, with trades executed when compatible orders align. Conversely, AMM relies on an algorithmic system that enables peer-to-peer trading by automatically adjusting asset prices in response to supply and demand fluctuations.
RFQ serves as a solution to address the challenges posed by both CLOB and AMM, such as slippage and front-running. As explained by Cerron, Convergence RFQ boasts the ability to eliminate slippage entirely. RFQ, in essence, empowers market makers and trading desks to provide competitive quotes and exercise control over their exposure before finalizing trades, as highlighted by Cerron.
Deribit, in a published article last year, emphasized the potential of RFQ, describing it as a means to establish a robust bridge between centralized exchange liquidity and decentralized pricing mechanisms, resulting in a hybrid model that ensures optimal execution for traders via an API. In simpler terms, RFQs are considered an exceptional tool for obtaining high-quality trade
execution.Convergence RFQ operating on both Solana and Arbitrum.
Convergence RFQ is in the process of developing its platform on Solana and has plans to extend its support to the Ethereum Layer 2 network, Arbitrum, as mentioned by Cerron. The platform’s anticipated launch is scheduled for early next month.
Currently, Convergence RFQ has a team of six individuals, and Cerron aims to expand the team by bringing on board additional members, with a specific focus on enhancing the marketing and growth functions.