Onchain perpetuals exchange Ostium unveiled a major backend infrastructure overhaul on Tuesday, according to the team's announcement. The platform introduced a new real-time decentralized execution layer representing a novel application of onchain liquidity pools with offchain hedging, and added institutional participants including Jump to serve as hedging partners.
Platform Background
Ostium is a decentralized perpetuals trading platform that was among the first to offer leveraged trading in traditional assets such as stocks, indices, commodities, ETFs, and forex directly through non-custodial crypto wallets. According to the announcement, the platform has processed over $50 billion in cumulative volume across more than 26,000 traders.
Previous Architecture Limitations
Under the previous model, Ostium relied on a public liquidity pool that both priced trades and absorbed all net directional risk. This dual-purpose design capped scale, execution quality, and open interest, according to the announcement. For example, if many users went long on gold, the pool absorbed the entire exposure, which spread liquidity thin and limited the platform's capacity.
New Decentralized Execution Layer
Ostium's upgraded backend now taps institutional participants, including Jump, alongside other unnamed prime brokers and "major institutions," to serve as hedging partners and take over the directional exposure of trades. Rather than recreating order books for assets that already trade trillions in volume offchain, Ostium routes to existing liquidity and focuses on execution, according to analysis cited in the announcement.
The new model connects onchain traders directly to traditional markets for deeper liquidity across equities, FX, commodities, and indices. Ostium transformed its existing onchain public liquidity pool into an "intraday lending buffer" that interacts with a separate capital pool hedging net exposures offchain through the institutional partner network.
"Programmatically hedging onchain flow with traditional market participants required building a new kind of infrastructure, a translation layer between smart contracts and institutional-grade messaging protocols, with sub-100-millisecond latency across every step," said Marco Antonio Ribeiro, Ostium co-founder and CTO, in a statement.
Self-Custody and Market Access
While Ostium now functions as a bridge between traditional finance and decentralized finance, users remain fully self-custodial while benefiting from institutional-grade liquidity, pricing, and depth from offchain venues. The upgrade enables the protocol to dramatically scale open interest and more closely match the depth of underlying markets, according to the announcement.
Kaledora Kiernan-Linn, Ostium co-founder and CEO, compared the upgrade to stablecoins, stating that Ostium now "extends the reach of the world's most liquid global markets to anyone with a wallet," similar to how "stablecoins extended the reach of the U.S. dollar."
Funding History
Ostium, founded by Harvard alums Kiernan-Linn and Ribeiro, has raised $27.8 million to date. The platform secured a $20 million Series A co-led by General Catalyst and Jump Crypto, disclosed in December.
