Why Build Variational

In 2021, co-founders Lucas Schuermann and Edward Yu left their roles managing one of crypto’s largest OTC desks to launch a proprietary trading firm. After spending two years integrating with and providing liquidity to nearly every major CEX and DEX, the structural limits of existing trading venues became obvious:

• Relying on order books makes bringing new markets on-chain a slow, subsidy-fueled grind. Exchanges are forced to pay millions in subsidies and rebates to external market makers just to bootstrap basic liquidity.

• The exchange model inherently leaks value, resulting in a continuous outflow of capital from the platform to external market makers.

• Institutional OTC and customized derivatives trading remains largely manual, often settled entirely off-chain via chat groups.

Variational was built to solve this infrastructure problem. Funded by trading profits, Lucas and Edward set out to build a new type of trading venue that vertically integrates liquidity provisioning. By integrating its own primary market maker that connects directly to CEX, DEX, and TradFi liquidity, Variational bypasses the slow grind of bootstrapping isolated order books and ends extraction from the platform by external market makers.