eToro is showing that retail brokerages are rethinking their approach to digital assets by investing in Extended, an on-chain perpetual futures platform. This partnership links Extended with Zengo, the self-custodial crypto wallet eToro bought earlier this year, creating a single system for decentralized derivatives trading.
While neither company publicly disclosed the exact figure of eToro’s stake, reporting from CoinDesk places Extended’s strategic round at $12.5 million.
Connecting Self-Custody to On-Chain Perps
Founded by former Revolut fintech executives, Extended operates as an on-chain perpetuals exchange built on Starknet. The protocol supports over 100 decentralized trading markets across traditional foreign exchange, equities, commodities, and crypto.
eToro is connecting Extended’s trading engine with Zengo’s multi-party computation (MPC) wallet system. This aims to let retail traders access high-leverage cross-asset derivatives without having to deposit their money into a centralized exchange.
Key elements of this strategic integration include:
- Sovereign Execution: Traders retain full control over their private keys via Zengo’s keyless wallet while interacting directly with Extended’s smart contract layer.
- Cross-Asset Diversification: Users gain exposure to synthetic stocks, fiat currency pairs, and commodity perpetuals settled fully on-chain.
- Direct Market Access: The setup bypasses traditional centralized brokerage custody, routing order execution and settlement through decentralized layer-2 infrastructure.
The Retail Brokerage Race to the Chain
This venture comes as major retail trading platforms accelerate their shift toward native blockchain architecture. Simple spot crypto trading once a primary revenue driver for retail brokers has faced compressed fees and growing user demand for self-custodial options.
Brokers are now competing to build integrated decentralized finance (DeFi) ecosystems rather than acting as simple asset middlemen. Robinhood’s recent launch of Robinhood Chain highlights this industry-wide pivot, as traditional platforms scramble to capture market share in on-chain tokenization, prediction markets, and automated derivatives execution.
As trading volumes migrate toward decentralized execution layers, the lines between traditional brokerage interfaces and self-custodial protocols are rapidly disappearing.
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