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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.

Sep 8, 2020 at 8:45 a.m. UTC
Updated Sep 14, 2021 at 9:53 a.m. UTC

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

  • 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

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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