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October 31, 2024

Ellipsis Labs

By Breck Stodghill

We’re excited to announce our lead investment in Ellipsis Labs as they build Atlas, a new blockchain purpose-built for verifiable finance. Ellipsis Labs is led by co-founders Eugene Chen and Jarry Xiao, who first met in middle school and reconnected after college while simultaneously experimenting on new financial primitives on Solana. For the last two years, they have been innovating at the edge of decentralized finance. Their market insight is simple: high-performance financial products can rival traditional finance without sacrificing transparency, auditability, or censorship resistance.

Coming from math, programming, and high frequency trading backgrounds, Eugene and Jarry believe that with blockchains we can build financial primitives that improve upon the opacity of traditional financial markets. At the same time they recognize the infrastructure challenges required to overcome the structural disadvantages of blockchain based financial products: namely slow blocktimes, capital inefficiency, and toxic MEV. They started Ellipsis Labs in 2022 to build a better backbone for decentralized finance.

Phoenix, their first product, is a permissionless limit order book exchange on Solana. They chose Solana because it allowed them to build an exchange with reasonable performance characteristics and sustainable liquidity. Since launching last year, Phoenix has done over $55B in non-incentivized trading volume. While an order book run on 400ms Solana blocktimes may provide tighter spreads and better execution than AMMs they still struggle to outcompete centralized exchanges with 15ms latency such as Binance.

This motivated the team to build their next product, Atlas, a purpose-built blockchain designed to enable financial applications that can rival traditional finance. There are two immediate goals for Atlas: 

  1. Build the platform that Ellipsis Labs wished had existed for Phoenix with core features centered around the needs of performant financial applications (i.e. reliable transaction delivery, low latency pre-confirmations, continuous and reliable oracle updates, honest sequencing, etc.).
  2. Increase product surface area to service liquidity on both Ethereum and Solana. 

Atlas leverages optimizations from the Solana Virtual Machine (SVM) for ultra-low fees and high transaction throughput. We believe Ellipsis Labs’ deep experience in building Phoenix on Solana positions them perfectly to address the scaling and infrastructure challenges that DeFi faces on general-purpose blockchains. Atlas will initially launch as an Ethereum Layer 2.

We’re thrilled to support Eugene, Jarry, and the rest of the Ellipsis Labs team as they redefine what’s possible in decentralized finance.

Breck Stodghill
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