A new Web3 startup called aPriori, founded by former quantitative traders and engineers from Coinbase, Jump Trading, and Citadel Securities, has secured $20 million in funding to expand its onchain trading infrastructure platform. The funding round saw participation from firms like Pantera Capital, HashKey Capital, Primitive Ventures, IMC Trading, and Gate Labs, bringing the company's total funding to $30 million.

Launched in 2023, aPriori is based in San Francisco and is focused on bringing high-frequency trading (HFT) to decentralized finance (DeFi). The platform aims to address several challenges currently present in onchain markets, including wide spreads, miner extractable value (MEV) leakage, and toxic order flow. In traditional finance, "toxic order flow" refers to trading activity that could expose market makers or liquidity providers to risks.

The growing interest from institutional investors in DeFi as an alternative source of yield is a key driver behind this funding round. Several factors are encouraging institutions to enter onchain markets, including favorable regulatory developments, the perceived benefits of blockchain technology, and increasing yield opportunities in DeFi. This influx of institutional interest has led to a greater demand for institutional-grade trading infrastructure. Decentralized markets are also showing potential for higher returns compared to traditional money markets, further attracting yield-seeking institutions.

aPriori is part of a growing sector of startups focused on building institutional-grade trading infrastructure onchain. For instance, Theo raised $20 million earlier in the year from backers like Citadel, Jane Street, and JPMorgan to develop HFT and market-making strategies onchain. Other platforms taking similar approaches include Aevo (formerly Ribbon), which specializes in derivatives and options infrastructure, the decentralized exchange dYdX, and Cega, which is developing structured products for onchain markets.