Sometimes it’s easy to forget that DeFi truly only began in 2020. As a result, this still-young sector is now experiencing its first major bear cycle.
Despite that, innovation continues. One particularly interesting area is derivatives. While tokenized stocks and other traditional trad-fi investment mechanisms have gained traction, it’s inevitable that the ecosystem will expand to incorporate more complex strategies.
ZKX is a derivatives trading platform built on StarkNet that recently announced a $4.5 million seed round. Among the investors are Alameda Research, the firm led by Sam Bankman-Fried that has been in many crypto headlines lately. Crypto.com is another prominent backer.
I had questions about the launch because I wanted to learn more. Below is a Q&A with ZKX founder Eduard Jubany.
CoinJournal (CJ): How would you describe ZKX and StarkWare to those who may not be familiar?
Eduard Jubany (EJ): ZKX is a permissionless derivatives protocol built on StarkNet with a decentralized order book and a distinctive approach to offering complex financial instruments as swaps. The protocol is DAO-enabled and seeks to improve the trading experience through gamified leaderboards and a novel approach to liquidity management. As a visible member of the StarkNet ecosystem, our mission is to democratize access to global yields by making them available to everyone, everywhere.
We chose to build on StarkNet because it provided an environment that enabled tasks not feasible in other web3 contexts and connected us with a curated developer community within the StarkWare ecosystem.
CJ : I see you previously worked at SOSV, a VC with $1 billion AUM among other roles. How did you get into crypto and eventually ZKX?
EJ: It’s an interesting story. I worked in venture capital across Asia and the United States. While at SOSV with Naman, we discovered a huge opportunity to serve users in emerging markets such as Indonesia and India. We recognized the many barriers people face when trying to access financial opportunities.
From that insight came the idea for ZKX: to help people in emerging markets access opportunities they previously could not. We thought about events like the GameStop saga and realized even participating in that market event was complex and difficult to access. If that experience was complicated for us, how much more so for the average user in those markets?
ZKX was founded on the belief that everyone should have access to investment opportunities, creating a level playing field for people from different countries and backgrounds.
We ultimately focused on ZK-Rollup technology because we believe it is the most scalable way to reach those rising markets.
CJ : Many projects failed during the last bear market. Do you think this cycle will be similar, and how is ZKX positioned to avoid the same fate?
EJ: There has indeed been a slowdown compared to the first quarter. Historically, crypto and traditional markets have sometimes shown inverse correlations, but the fallout from events like the Luna collapse and a broader economic slowdown are still being felt.
The ZKX team has built through several cycles, and we can plan with that experience in mind. Market movements reflect price, not necessarily underlying value. They don’t always capture the value being built behind the scenes or the innovation taking place.
We believe the capabilities we’re building at ZKX are a vital piece in democratizing global markets. Even if trading activity is lighter across the board, the infrastructure and products we develop are built to last.
My advice for teams in a bear market is to keep building and prepare a runway for the long term so you can scale during the next bull market.
CJ : I notice one investor is Alameda Research, which has recently acted as a lender of last resort in crypto. Were you happy to have Alameda on board, and does their increased risk-taking concern you?
EJ Alameda and other partners have actively supported and built the Web3 ecosystem for years. Their mission, like ours, is to advance the industry and improve infrastructure and awareness.
The downturn is global and driven by macroeconomic conditions as central banks tighten rates and risk is repriced across asset classes. Many firms with historically stable revenue and financials now face challenges tied to loans and investments. In the long run, this should strengthen the ecosystem by clearing out weaker players and focusing capital on the strongest ones.
Decentralized finance platforms have generally remained resilient and operational through the downturn, while some centralized exchanges and providers failed, underscoring the benefits of decentralized infrastructure.
CJ : Are you concerned about regulation in the crypto derivatives space?
EJ Crypto derivatives can help both retail and institutional users hedge against price declines, making them healthy tools for the ecosystem. Recent events show decentralized protocols can withstand adverse conditions better than some centralized entities. Protocols like Aave and Compound have remained robust while certain centralized operations collapsed. Because rules and governance are encoded in smart contracts on-chain, we hope regulators will better understand how decentralized protocols can be fair and secure for users.
CJ : Decentralized derivatives trading has seen substantial growth over the past couple of years. What advantages does it offer over centralized counterparts, and do you think it can capture meaningful market share?
EJ The biggest barrier to adoption is user experience. Today, most decentralized protocols require a crypto wallet to interact. With account abstraction and zk-rollup chains like StarkWare, we see an opportunity to provide simple onboarding experiences—such as email-based sign-ins—for everyday users, avoiding the pitfalls and complexity many currently associate with DeFi.