Tracer DAO raises $4.5M to launch derivatives for anything ‘with an oracle feed’

Decentralized derivatives platform, Tracer DAO, has announced a successful $4.5 million fundraising round to expand its team and product suite.

They hope to launch innovative derivatives for “any market with an oracle price feed,” with plans to one day allow ordinary consumers to hedge the cost of commuting and other household bills using tokenized derivatives.

This week’s raise saw participation from crypto venture heavyweights, including Framework Ventures, Maven 11, DACM, and Apollo Capital. The investors will share 10% of the project’s governance token supply, which will be vested linearly over two years.

Speaking to Cointelegraph, Pat McNab, Tracer DAO founder and co-founder of Mycelium — the Australian development team working to build Tracer DAO — emphasized that the team is currently working to launch v1 of its open-source perpetual swap contracts to Arbitrum mainnet in the coming months.

McNab described the swaps as standing out from the competition through its “highly capital efficient” design and unique insurance pool that allows anyone to “become an insurer for the protocol and earn interest.”

“For each perpetual swap market there will be an underlying insurance pool [...] that insurance pool collects funding payments in the form of an interest rate paid by traders,” he said, adding:

“If a trader goes under margin and there is counterparty risk, this is when the insurers funds will have to be used.”

Tracer is also currently working to launch leveraged tokens, predicting they will go live before the end of the year. Tracer DAO also plans to hold a public raise via Gnosis Auction in the coming months.

Looking forward, Tracer articulates a bold mission of enabling derivatives for “any market that has an oracle feed,” with McNab emphasizing the opportunity to use cryptocurrency to unlock new markets tied to real-world assets.

“We’re working with Chainlink currently on trying to aggregate fuel pricing data or gas pricing data around different jurisdictions such that, say, in a neo-banking app, consumers can effectively budget for their fuel consumption by buying into a derivatives position using a perpetual swap contract,” he said.

“Our vision for price feeds, especially in the real world [...] will certainly tend down the path of having consumers able to hedge their consumption to local goods markets.”

McNab added that Tracer is currently working with the Royal Melbourne Institute of Technology to “unpack how the water markets work within Australia, especially to determine if we can create more ways for people to effectively manage their risk when it comes to consuming water on a day-to-day basis.”