Ostium Upgrades Backend, Adds Institutional Liquidity Partners Including Jump

Onchain perpetuals exchange Ostium unveiled a major backend infrastructure overhaul on Tuesday, according to the team’s announcement. The upgrade introduces a new real-time decentralized execution layer featuring onchain liquidity pools with offchain hedging, and brings institutional participants including Jump on board as hedging partners.

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. The platform has processed over $50 billion in cumulative volume across more than 26,000 traders, according to the announcement.

Previous Model and Scaling Limitations

Ostium previously relied on a public liquidity pool that both priced trades and absorbed all net directional risk. This dual-purpose model capped scale, execution quality, and open interest, according to the announcement.

Under the old system, if many users went long on an asset like gold, the pool absorbed the entire exposure, spreading liquidity thin. This constraint limited the platform’s ability to scale.

New Execution Layer and Institutional Partnerships

On Tuesday, Ostium rolled out a new model that taps institutional participants, including Jump, alongside other unnamed prime brokers and “major institutions,” to serve as hedging partners. These partners take over the directional exposure of trades.

The upgraded backend connects onchain traders directly to traditional markets for deeper liquidity across equities, FX, commodities, and indices. 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.

In this model, Ostium now functions as a “decentralized execution layer” for global markets.

Technical Infrastructure

Ostium transformed its existing onchain public liquidity pool into an “intraday lending buffer” that interacts with a new separate capital pool. This new capital pool hedges net exposures offchain through a network of institutional partners, according to the announcement.

“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,” Ostium co-founder and CTO Marco Antonio Ribeiro said in a statement.

“This enables the protocol to dramatically scale open interest and more closely match the depth of underlying markets,” the announcement reads.

Self-Custody and Market Access

While Ostium now acts as a TradFi-DeFi bridge, its users remain fully self-custodial while benefiting from institutional-grade liquidity, pricing, and depth from offchain venues.

Kaledora Kiernan-Linn, co-founder and CEO of Ostium, compared the upgrade to stablecoins, noting 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 and Background

Ostium, founded by Harvard alums Kiernan-Linn and Ribeiro, has raised $27.8 million to date. The company disclosed a $20 million Series A in December, co-led by General Catalyst and Jump Crypto.