What Is Variational
Variational is a protocol that provides infrastructure for peer-to-peer trading, clearing, and settlement of perpetuals and generalized derivatives. The Variational Protocol enables safe and efficient bilateral trading of options, futures, perpetuals, exotics, and more. Multiple apps have been built on the Variational Protocol, including Omni for perpetuals trading and Pro for institutions to trade customizable OTC derivatives.
The Omni Application
Our first app is Omni, a platform for trading leveraged perps on hundreds of different underlyings with zero fees. Our mission with Omni is to build the most user-friendly trading experience in crypto.
Zero Fees: Omni does not have trading fees. The only fees on the platform are a 0.1 USDC fee for each deposit/withdraw to protect against spam. This is only possible due to Omni's unique design where the Omni Liquidity Provider is the counterparty to every trade on Omni.
Huge Variety of Listings: Omni lists hundreds of markets on mainnet, with more added daily via our automated listing process. Omni is also able to list perps for exotic markets like volatility indices, RWAs, interest rate swaps, and in-game items due to Omni's in-house quoting algorithms and lack of dependence on external market makers.
Deep Liquidity: The Omni Liquidity Provider accesses liquidity from CEXs, DEXs, DeFi, and OTC channels to offer the tightest possible spreads on each listed market. Omni's RFQ-based design unlocks immediate liquidity for each newly listed asset.
Safe Design: Each user on Omni has their own on-chain settlement pool (smart contract) where both the user and OLP deposit funds. This design isolates risk by user, helping avoid the potential for socialized losses or platform-wide contagion, even when dealing with volatile or illiquid assets. Omni also maintains a variety of risk limits to protect itself from market manipulation and toxic flow.
Sustainable Yield: Deposits to the Omni Liquidity Provider will be open to all users, allowing the community to participate in returns (yield) from its market making activities on the platform. OLP is not risk free--it is a sophisticated market making strategy that can experience both gains and losses.
The Pro Application
As with traditional finance, a large portion of trading volume in crypto happens via OTC derivatives trading. However, existing OTC derivatives trading workflows are extremely manual and inefficient.
Throughout their time running a quant hedge fund and one of the leading market making desks in crypto, Lucas and Edward saw firsthand the inefficiencies that exist in institutional OTC derivatives trading. Trades are commonly negotiated via Telegram chats and other informal channels, then manually settled retroactively, with slow processes for margin calls exposing participants to substantial counterparty risk.
Our mission with Pro is to eliminate these inefficiencies and drastically streamline institutional OTC derivatives trading, unlocking billions of dollars in volume through better price discovery and accessibility.
Pro automates the entire flow of institutional trades--from booking and clearing to settlement--and brings it on-chain. Institutions can create completely customized derivatives, set specific margin and liquidation rules, escrow collateral in segregated contracts on-chain, and use the Variational Oracle for pricing. Variational Pro is being built as the product that Lucas and Edward wished existed while processing hundreds of billions in institutional volume at their previous roles.
The thesis of Pro is simple:
Institutional derivatives trading currently happens either in manual direct channels (e.g. Telegram groups) or on platforms like Paradigm and Deribit.
Direct channels are extremely manual, inefficient, and risky.
Platforms like Paradigm and Deribit lack customization and only support options on majors (BTC, ETH), yet still process upwards of $1T in annual volume.
Pro can offer the same level of customization as direct channels while providing the efficiency of automated, on-chain clearing and settlement. Pro creates a more efficient and comprehensive trading experience for institutions, opening up the OTC market to more takers, more makers, more instrument variety, and greater safety.
About ProInvestors
Variational is backed by industry leaders, including Bain Capital Crypto, Peak XV (formerly Sequoia India/Southeast Asia), Coinbase Ventures, Dragonfly, Hack VC, North Island Ventures, Caladan, Mirana Ventures, Zoku Ventures and more.
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