Crypto options trading startup Synquote closed a $2.8 million seed funding round to build out a platform for trading derivatives contracts in tokens that don’t usually have such markets.

Initialized Capital led the round.

Synquote, a self-styled decentralized exchange (DEX), plans to support the buying and selling of options in over 500 generally illiquid instruments atop layer2 Polygon, Avalanche and BNB Chain. It unlocks the liquidity by letting traders source options quotes directly from market makers – a first in decentralized finance, according to Imran Khan, whose startup accelerator AllianceDAO incubated Synquote and is also investing in the round.

“There’s a structural reason why options are hard,” Synquote founder Ahmed Attia told CoinDesk in an interview. “You need sophisticated people on one side of the trade.”

Attia, a DEX developer veteran, started building Synquote’s market maker matching model in 2021. He’s planning to use the funding to hire more staff with a focus on nabbing former options traders.

The platform will seek to bring European-style options trading to newcomer audiences, a review of Synquote’s documentation shows. Users can make calls or puts across five tokens: ETH, BTC, AVAX, LINK, and MATIC.

Attia said the bear market is “a great time” for traders to start playing around with options, which he said can help them hedge downside risks.

Coinbase Ventures, CMT Digital, Polygon, and Ryan Selkis of Messari also participated in the round.