Kraken-Backed Startup Launches Hybrid Crypto Exchange With $14M Raise

Crypto exchange startup Rails has officially launched its trading platform after securing $14 million in fresh funding, bringing its total raised to $20 million. Backers include Kraken, CMCC Global, Slow Ventures, Round13 Capital, and Quantstamp.

Rails offers a hybrid exchange model, merging the speed of centralized trading with the transparency and control of on-chain asset custody. The platform features a centralized matching engine for trade execution, while settling trades on-chain using zero-knowledge proofs and Merkle trees for enhanced privacy and verifiability.

“All transactions are rolled up and posted on-chain for full transparency,” said CEO Satraj Bambra. This approach enables users to retain control over their assets without sacrificing performance.

The exchange’s infrastructure also integrates traditional finance safeguards via a transparent market maker structure with dedicated capital.

Sam Lessin, General Partner at Slow Ventures, remarked: “Rails is the first exchange I’ve seen where neither security nor speed is compromised.”

At launch, Rails will support perpetual futures contracts collateralized with stablecoins, operating exclusively on Ink, a layer-2 blockchain developed by Kraken. The company has no immediate plans to list other assets beyond Ink.

Founded in 2023 by the team behind BlockEQ (acquired by Coinsquare in 2018), Rails aims to reshape crypto trading with its balanced focus on speed, security, and decentralized asset control.

Source: Decrypt

Voice of Osiz

This announcement from Rails marks a significant and much-needed progression in the crypto exchange space. The industry has long grappled with the trade-off between execution speed and asset custody, and Rails’ hybrid model offers a well-balanced solution. Their focus on perpetual futures via a Layer-2 infrastructure is a clear indicator of how decentralized trading platforms are evolving towards more secure, efficient, and user-centric experiences.