Variational, a derivatives protocol built on Arbitrum, announced on Wednesday, May 20, 2026, that it has raised $50 million in a Series A funding round led by Dragonfly Capital. The Cayman Islands-based startup plans to use the capital to scale its infrastructure for peer-to-peer trading, clearing, and settlement of perpetuals and generalized derivatives. The round saw participation from Bain Capital Crypto and Coinbase Ventures, markng a significant expansion for the firm as it bridges traditional finance liquidity with onchain trading.
The company was founded in 2021 by CEO Lucas Schuermann and Edward Yu. Both founders previously held senior roles at Genesis Global Trading, where Lucas Schuermann served as vice president of engineering and Edward Yu led quantitative research. They departed the institutional lender in 2021, two years before the firm’s eventual shutdown. Their experience in quantitative finance led Variational to operate incognito as a profitable proprietary market maker for two years starting in early 2022 before pivoting to develop its own decentralized protocol.
The firm’s technical approach focuses on a Request-for-Quote (RFQ) system and its Omni Liquidity Provider (OLP) vault, which sources liquidity from traditional finance (TradFi) dealers and exchanges. By keeping margin in smart contracts and settling via stablecoins, Variational aims to enhance the security and efficiency of peer-to-peer digital asset trade and generalized derivative instruments. This structure targets both retail users through a “zero-fee” app called Omni and institutional clients via a Pro application for over-the-counter (OTC) trades.
Expanding into traditional finance commodity markets
Variational is currently in the first phase of its product rollout. Users can already trade gold, silver, copper, and oil through a single cross-margined account using existing crypto-native real-world asset (RWA) liquidity. This initial phase demonstrates the protocol’s ability to handle assets beyond standard cryptocurrencies, providing a unified venue for diverse market exposures.
The team plans to scale these offerings throughout the summer of 2026. The second phase of the rollout will involve launching over 100 TradFi markets by tapping directly into dealer liquidity. This expansion follows a general trend where decentralized exchange growth is increasingly driven by the integration of more sophisticated financial products and deeper institutional liquidity pools.
The protocol’s OLP vault acts as the central counterparty, aggregating volume from varied financial venues to create deeper markets. While quotes can be sourced from onchain venues, the underlying liquidity infrastructure remains rooted in traditional financial systems, allowing for tighter spreads and more reliable execution for pro-level traders and mathematicians.
Mainnet goals and future network expansion
Before this Series A round, Variational closed a $10.3 million seed round in December 2021, which was led by Bain Capital Crypto and Peak XV Partners. That early round included Dragonfly Capital, Coinbase Ventures, HackVC, and North Island Ventures. Total funding for the project now sits at roughly $60.3 million, providing a long runway for the team to expand its current headcount of seven employees to a projected 10 to 15 members by mid-2025.
Looking at the technical roadmap, a private Mainnet for specific audiences is expected in late 2024, followed by a public Mainnet launch in the first quarter of 2025. Reports indicate that the project will issue its own native token shortly after the public transition. This move coincides with broader shifts in the market, as seen when institutional market sentiment reacts to new decentralized infrastructure developments.
While the protocol is currently anchored to Arbitrum, the founders have expressed intentions to expand to other leading Layer 1 and Layer 2 projects in the future. By developing a retail-friendly brokerage and institutional OTC tools simultaneously, Variational aims to capture a broad cross-section of the derivatives market. The ultimate goal is to provide a seamless gateway for traditional market participants to settle complex financial contracts on the blockchain.
