MNX, a decentralized futures exchange focused on the AI economy and built on the Ethereum Layer 2 network MegaETH, has raised $6.4 million in a pre-seed funding round.

Village Global led the round, with Cambrian, North Island Ventures, Finality Capital, Relay Digital, as well as angel investors including Dwarkesh Patel, Byrne Hobart, Augur and Gnosis co-founder Matt Liston, and Gitcoin's Scott Moore participating, MNX said Wednesday.

The startup began fundraising in March, closing the first tranche within a couple of weeks and a second tranche last week following additional investor interest, MNX co-founder and CEO Stephen Grugett told The Block.

The round was structured as a simple agreement for future equity (SAFE) with token warrants at a $40 million valuation, Grugett said. No investors in the round received board, advisory, or observer seats, he added.

AI-focused futures exchange

MNX was formed last fall by Grugett and Ian Philips, co-founders of prediction markets platform Manifold Markets, to create a trading venue for AI-related assets that the platform says are currently difficult to access through existing platforms.

MNX's planned products include valuation futures, equity perpetuals, compute perpetuals and prediction markets, each focused on the AI economy.

For valuation futures, Grugett said MNX uses dated futures rather than perpetual contracts because, in its view, perpetuals are not well-suited for trading illiquid private company valuations. The approach differs from a growing number of platforms offering pre-IPO perpetual markets.

MNX's equity perpetuals will focus primarily on AI-related companies, particularly foreign-listed stocks such as Z.ai and Sivers, while compute perpetuals will use indices from research firm SemiAnalysis. "Our edge is being a one-stop shop to trade/hedge across the entire AI value chain, from compute to electricity prices to AI benchmark numbers to copper prices to public equities to private lab valuations, etc.," Grugett said.

For prediction markets, the platform will focus on AI-specific topics rather than mass-market events such as sports, listing markets tied to AI benchmark numbers, product releases, company financials, and geopolitical issues, Grugett said. It also plans to offer leverage on markets where appropriate, he added.

Rather than relying on a continuous order book, MNX said it uses 200-millisecond batch auctions enabled by MegaETH's sub-millisecond block times. Grugett said the design is intended to reduce the latency race and maximum extractable value, or MEV, while giving all trades executed in the same auction the same price.

MNX launch timeline

The exchange is currently in private beta with institutional partners on the MegaETH testnet and plans to launch on mainnet later this summer.

When asked how MNX plans to attract users and liquidity, Grugett said liquidity remains the biggest challenge for any new exchange. To address that, he said, MNX plans to launch a single Hyperliquidity Provider (HLP)-style liquidity vault managed by the team, following a model pioneered by Hyperliquid and Lighter to help provide market liquidity across the platform.

As for users, Grugett said MNX plans to target technology workers and retail traders seeking AI exposure while replicating the community-driven distribution strategy that helped grow Manifold Markets.

"Much of our approach is attempting to replicate the same distribution strategy that worked for Manifold: offering unique markets that resonate with nerds, and partnering with Silicon Valley thinkers and thought leaders to help drive distribution to new audiences," he said.

The platform also sees an opportunity among crypto users who are increasingly using tokenized real-world assets as trading instruments.

The fresh capital will be used to seed an HLP-style liquidity vault, as well as hire across development and growth functions, Grugett said.

MNX currently consists of the co-founders and several part-time non-technical contractors, Grugett said, adding that the startup plans to hire three to six full-time employees over the next three months, noting, "We think we can scale to billions in transaction fees without being much larger than that."

MNX also has no plans to expand beyond MegaETH, Grugett said, noting that the team does not view multi-chain support as being that important and expects blockchain infrastructure to remain in the background rather than something users actively think about.

Philips is no longer involved with Manifold Markets, Grugett said, adding that he has appointed a co-chief executive officer as his successor at Manifold and is in the process of stepping away from the prediction market platform to focus on MNX.

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