eToro Invests in Extended for DeFi

EToro led a $12.5 million strategic investment in Extension, an on-chain perpetual futures exchange, with Jump Crypto also participating. This investment is closely tied to EToro's earlier acquisition of self-custody wallet provider Zengő for $70 million. The core strategy involves integrating Extension's perpetual futures engine into the Zengő wallet, aiming to provide EToro's 40 million registered users with seamless access to decentralized finance (DeFi) products and on-chain derivatives while maintaining asset custody. This initiative comes as EToro's crypto trading profits have slowed, prompting a strategic pivot towards expanding its Web3 ecosystem and diversifying its offerings beyond spot crypto trading. The move reflects a broader trend among traditional brokers like Robinhood Markets and Coinbase to enter the rapidly growing DeFi derivatives market, either by building their own infrastructure or partnering with established on-chain trading engines. Extension, founded by former Revolut employees and built on StarkWare Industries's StarkEx scaling infrastructure, is positioned to become a critical backend partner for consumer-facing financial platforms as brokerages increasingly adopt this model.