eToro Invests $12.5M in Onchain Derivatives Platform Extended

Digital broker eToro has invested $12.5 million into Extended, an onchain derivatives platform founded by former Revolut executives. This funding round includes participation from other notable firms such as Jump Crypto and Alber Blanc. The investment aligns with eToro's strategy to expand its offerings in decentralized finance (DeFi), particularly through the integration of perpetual futures in its Zengo wallet, which it acquired for $70 million earlier.

As part of its strategy to meet user demand for DeFi products, eToro intends to integrate Extended's perpetual futures engine directly into the Zengo wallet. Elad Lavi, eToro's executive vice president of corporate development and strategy, commented, "We are seeing growing demand from our users for seamless access to DeFi products. Our recent acquisition of Zengo and our investment in Extended are key parts of our strategy to meet this demand and expand our Web3 ecosystem." This indicates a solid commitment from eToro to enhance its position in the evolving market.

The urgency behind this investment reflects a broader trend in the financial sector where traditional brokerage firms, like Robinhood, are increasingly integrating blockchain capabilities. Robinhood has recently expanded its services to include tokenized stocks and is venturing beyond cryptocurrencies with perpetual futures contracts covering commodities, which further blurs the lines between crypto and traditional financial markets.

Extended, with its leadership from former Revolut crypto head Ruslan Fakhrutdinov, has already achieved significant trading metrics, processing more than $245 billion in volume with over 100 perpetual markets as of June. The platform plans to increase its offering to include spot trading and tokenized real-world assets, indicating its growth strategy in the competitive landscape of onchain derivatives.

The investment by eToro highlights the shift towards a more integrated financial trading experience, where platforms seek to become comprehensive solutions for users. As market conditions evolve and brokerages race to adopt blockchain-based trading solutions, such investments suggest a convergence of digital asset infrastructure and traditional capital markets. Ouriel Ohayon, managing director at Zengo, remarked, "Capital markets are increasingly converging with digital asset infrastructure," reinforcing the future-focused nature of this investment strategy.

The developments in this space will require monitoring for potential regulatory considerations as brokerages like eToro and Robinhood navigate the complexities of offering blockchain-enabled services. Future announcements from Extended regarding its spot trading and asset diversification could also impact the competitive landscape significantly.