Memecoin leverage trading protocol Wasabi raises $3 million led by Electric Capital

Wasabi, a memecoin and NFT leverage trading protocol, has raised $3 million in a seed funding round led by Electric Capital .

Other investors included Alliance, Memeland, Spencer Ventures, Pudgy Penguins CEO Luca Netz, Magic Eden co-founder Zhouxun Yin, angel investor Santiago Santos, and Crypto Twitter personalities Cygaar, Zagabond, DCF God and Bob Loukas, Wasabi said Monday.

Wasabi started raising funds for the seed round in early January and closed it at the end of February, co-founder Eren Derman told The Block. He declined to comment on the structure of the round and valuation.

What is Wasabi?

Wasabi is a decentralized finance (DeFi) protocol that lets users trade "long tail assets" such as memecoins and NFTs with leverage, Derman said, adding that there was a lack of financial infrastructure for long-tail assets. Thus, Wasabi was created "to allow for efficient price discovery on long tail assets."

With Wasabi, users can long, short and stake memecoins and NFTs. "More exotic, lower liquidity assets range from 2-3x leverage, while flagship assets like ETH and USDB have up to 10x leverage," said Derman.

Wasabi claims to be the first protocol to enable leveraged trading backed by actual assets. "Wasabi offers on-chain perps [perpetual futures], meaning all trades are asset-backed, removing counterparty risk," Derman said. "This is significantly different from conventional perp decentralized exchanges like Aevo and Hyperliquid, which rely on market makers to keep their synthetic prices feed pegged to the actual price of assets on-chain." 

Wasabi on Blast

The Wasabi protocol is available on Ethereum and Blast , an Ethereum Layer 2. But Derman said it has the most user activity on Blast, having enabled liquidity for projects like Pacmoon, Blastopians and Juice Finance.

Wasabi first launched its options and perpetual futures products on Ethereum and later launched its perpetual futures product on Blast. Derman said Wasabi has more than 18,000 traders who have generated over $500 million in trading volume since January, and the protocol currently has a total value locked of over $111 million with over 66,000 liquidity providers.

With fresh funding in place, Wasabi plans to expand its current team of six people to 10 in the near future, said Derman. He added that the project is hiring a smart contract engineer, back-end developer, quantitative engineer and head of operations.

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