eToro Invests in On-Chain Derivatives Platform Extended

Digital broker eToro has led a $12.5 million funding round for on-chain derivatives platform Extended, marking a significant expansion of its decentralized finance (DeFi) offerings. The investment is part of eToro's broader strategy to bring DeFi products to its users, according to executive VP Elad Lavi.

eToro plans to integrate Extended's perpetual futures engine directly into its recently acquired self-custody wallet, Zengo, giving users access to on-chain derivatives while retaining custody of their assets. Over time, the company plans to bring broader DeFi products into the core eToro platform.

The move comes as competition among digital brokerages is shifting toward blockchain-based trading infrastructure. Rival broker Robinhood has rolled out its own blockchain, expanded its tokenized stock offering, and plans to extend its perpetual futures business beyond cryptocurrencies into commodities such as gold and oil.

Perpetual futures, once a niche crypto product, have become one of the industry's fastest-growing markets. Alongside cryptocurrencies like Bitcoin, trading platforms are increasingly listing contracts tied to equities, commodities, and other real-world assets, blurring the line between crypto-native and traditional financial markets.

Led by former Revolut crypto head Ruslan Fakhrutdinov, Extended had processed more than $245 billion in trading volume as of June and supports more than 100 perpetual markets. The firm plans to expand into spot trading, tokenized real-world assets, and multi-asset collateral.

The investment points to a broader race to become what is best described as the "everything exchange" or "everything app" for financial markets. Coinbase has expanded into perpetual futures, Robinhood is pairing tokenized stocks with event contracts and commodity perps, and prediction market operator Kalshi recently announced its own on-chain derivatives platform.

The market reaction to eToro's investment in Extended has been positive, with many seeing it as a significant step forward for the adoption of DeFi products. However, some institutional investors have expressed concerns about the regulatory environment and the potential risks associated with on-chain derivatives.

As the financial industry continues to evolve, it is likely that we will see more traditional brokerages and financial institutions making significant investments in DeFi and blockchain-based trading infrastructure. The question remains whether these investments will be enough to keep pace with the rapidly changing landscape of financial markets.