City Protocol, an onchain structured products infrastructure provider, has successfully completed its seed and Pre-A funding rounds, raising $11 million in total from a diverse group of institutional investors. According to reports from City Protocol, the funding round drew participation from Dragonfly, Jump Crypto, CMT Digital, Stratified Capital, Adaverse and Mirana — a mix of crypto-native funds, market-making and trading firms, and ecosystem funds that brings both distribution and capital to the company. The company announced this development on August 26, marking a significant milestone in its expansion of blockchain-based investment infrastructure.
City Protocol's flagship product, Venzo, currently hosts four strategy vaults with $40 million in total value locked (TVL) and is running its inaugural Polis Points season. As reported by City Protocol, Venzo is deployed on EVM-compatible networks with chain abstraction delivering a unified user experience, connecting to yield and strategy providers while routing execution and lending through leading decentralized protocols. The platform offers an SDK and portfolio data interfaces, allowing partners to integrate vault products into their front ends within days. Information released with the financing announcement places Venzo's total value locked at about $30 million, though an earlier version cited $40 million in TVL.
City Protocol has divided its infrastructure into three distinct layers covering tokenization, vaults, and issuance and operations. The tokenization layer converts investment strategies or asset classes into products that can be distributed and tracked on-chain, while the vault layer handles deposits, withdrawals, execution limits, accounting and redemptions through standardized smart contracts. The issuance and operations layer covers functions across the product lifecycle, including issuance records, net asset value calculations, methodology rules, rebalancing, reporting, subscriptions and redemptions. By splitting these functions into reusable components, strategy providers can launch products through a common infrastructure instead of developing separate technical stacks for each strategy launch.
Venzo currently operates two vault types aimed at democratizing previously institutional-only investment strategies. According to City Protocol, Strategy Vaults bring strategies that were previously the preserve of institutions and professional investors onchain, spanning quantitative hedging, cross-exchange arbitrage, private credit and onchain yield strategies. The Thematic Portfolios product line, launching soon, will package investment themes into rule-based baskets with user assets remaining in their own wallets throughout, with no funds pooled and no NAV accounting run. The planned thematic portfolios will operate in two main categories: person-tracking portfolios based on holdings disclosed by prominent investors, institutions and public officials, and sector-themed portfolios covering areas including space exploration, metals and electric vehicles.
The funding comes as traditional financial institutions also test blockchain infrastructure for structured investment products. In July, crypto.news reported that HSBC completed its first tokenized structured product issuance through a private placement for institutional investors in Hong Kong, issuing U.S. dollar-denominated structured notes with Marketnode acting as tokenization agent. City Protocol's model targets the same process, offering infrastructure that outside managers and platforms can use to create and operate different products on-chain. However, the strategy-vault model faces regulatory scrutiny, with SEC Commissioner Hester Peirce warning in July that some crypto vault structures could fall under federal securities laws depending on design and management. Peirce noted that managerial control and whether vaults resemble investment contracts when users commit assets to common enterprises may trigger securities regulations.
