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Finance

Bitfinex Invests in Derivatives Exchange Built With Bitcoin's Lightning Network

The raise came after the new trading platform reached nearly $10 million in aggregate trading volume.

By Zack Voell
AccessTimeIconSep 8, 2020 at 8:45 a.m. UTC
Updated May 9, 2023 at 3:11 a.m. UTC
LN Markets aggregate volume since March 2020
LN Markets aggregate volume since March 2020

Lightning Network-based derivatives platform LN Markets closed a pre-seed funding round joined by Bitfinex and other early-stage Bitcoin startup investors.

  • Launched in March 2020, LN Markets has reached nearly $10 million in aggregate traded volume and has over 100 channels connected to its exchange.
  • The platform is designed to avoid slow and costly on-chain transactions by connecting traders to a bitcoin derivatives market by “streaming” their funds through the Lightning Network, according to the project’s founders.
  • When asked, the LN Markets team declined to disclose the amount raised.
  • The exchange offers up to 50x leverage, according to a presentation shared with CoinDesk, and users can trade directly from any Lightning Network wallet.
LN Markets trading portal demonstration shared with CoinDesk
LN Markets trading portal demonstration shared with CoinDesk
  • Bitfinex’s CTO Paolo Ardoino said, “This is one of our first public investments and underlines our support for the Lightning Network.”
  • Because the Lightning Network is a technology that Bitfinex “loves,” it is “important for us to provide funding and to participate in such an innovative venture,” he added.
  • Directly linking users’ wallets to the derivatives exchange “sets an example of how exchanges should let users operate with their funds,” said Tobias Hoffmann, bitcoin developer and trader on LN Markets.
  • Bitcoin's Lightning Network has enjoyed steady growth over the past few years, adding its largest number of new nodes in a single month in August, as CoinDesk previously reported.
LN Markets aggregate volume since March 2020
LN Markets aggregate volume since March 2020

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CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk employees, including journalists, may receive options in the Bullish group as part of their compensation.