Drift Labs, the developer of a decentralized finance platform built on the Solana blockchain, announced Thursday it has raised $25 million in new funding to expand its services.
The Series B round was led by Multicoin Capital and attracted investments from Blockchain Capital, Folius Ventures, Maelstrom and Primitive.
The company said it intends to use the new capital to fund its goal of expanding its “SuperApp” cryptocurrency exchange for financial services, which includes spot and derivative trading, borrow-lend markets and prediction markets.
Drift differentiates itself from centralized cryptocurrency exchanges such as Coinbase Global Inc. and Binance Holdings Ltd. in that it’s a peer-to-peer marketplace where users can trade cryptocurrencies without the need for an intermediary. It’s built on the Solana blockchain, the third-largest blockchain by total value locked, and competes with the second-largest blockchain by market cap Ethereum, which is similarly used for decentralized finance, or DeFi.
Solana is host to multiple decentralized exchanges including Raydium, Orca and Jupiter. The latter eclipsed the notable Ethereum DeFi exchange UniSwap during early January in trade volume by racking up more than $1.2 billion in transactions.
In an interview with Fortune, Drift Labs co-founder Cindy Leow said that Drift would stand out against its Solana rivals by providing a better depth of liquidity and a superior suite of products. For example, its most popular product, a form of derivative called a perpetual future, is a type of bet made on the future price of an asset without an expiration date.
“We see ourselves as building out the foundations of an on-chain financial institution,” Leow told Fortune. “We’re looking to expand our product speed even further.”
Leow said the decision to build Drift on Solana instead of Ethereum, which remains the largest blockchain for DeFi in terms of projects and volume, is that Solana offers a better user experience on its main chain. To use Ethereum efficiently, developers use a second layer of blockchain technology to roll up transactions to lower fees and accelerate transaction speeds called layer-2s.
“When we’re thinking about a future where every single asset will be tokenized, we don’t think that an issuer is actually going to look at Ethereum,” she said. “They’re probably going to look at the chain that has the highest amount of activity, the highest amount of users, and the most seamless integration.”