eToro invested $12.5M in on-chain perpetuals exchange Extended and will integrate it into its Zengo wallet. The move comes as eToro's crypto profit dropped 72% in Q1. The integration tests whether self-custody derivatives can attract mainstream users.
Alpha Score of 27 reflects poor overall profile with poor momentum, poor value, weak quality, strong sentiment.
eToro led a $12.5 million investment in Extended, an on-chain perpetual futures exchange founded by former Revolut employees. Jump Crypto also participated in the round, announced July 2. The investment ties directly to eToro's acquisition of self-custody wallet Zengo in April for an estimated $70 million. Extended's perpetual trading engine will be integrated into the Zengo wallet, letting users trade on-chain derivatives while retaining custody of their assets.
Extended runs on StarkWare's StarkEx validity-rollup infrastructure, a design that settles trades on Ethereum but processes them off-chain for speed. The exchange launched public trading in late 2024. It has not disclosed volume, open interest, or total value locked.
eToro's push into DeFi derivatives comes as its crypto business shrinks. In Q1 2026, eToro generated $13 million in profit from crypto, down from $46 million in the same quarter a year earlier, according to The Block. Crypto now accounts for about 5% of eToro's total net trading profit of $258 million. CEO Yoni Assia described the Extended and Zengo investments as steps toward a broader DeFi ecosystem for the platform's 40 million registered users.
The move is not isolated. On July 1, Robinhood launched its own perpetual futures offering through Lighter, a platform backed by Sequoia and Paradigm, as part of its European crypto expansion. Coinbase earlier this year introduced 24/7 perpetual contracts linked to U.S. stocks and ETFs, expanding beyond crypto-native assets. Each broker is building a stack that combines spot trading, self-custody, and on-chain derivatives, a trend tracked in our crypto market analysis.
The Extended-Zengo integration poses a specific question: can a self-custody wallet serve as a frictionless gateway to on-chain perpetuals? For eToro users accustomed to exchange-based margin trading, moving to a wallet where they manage private keys and pay gas fees introduces a different set of frictions. Liquidation mechanics on chain differ from those on centralized exchanges. There is no margin desk to call when a position is close to being closed.
Extended and eToro have not detailed how the integration will handle these operational details. The wallet interface will need to display real-time funding rates, liquidation prices, and gas cost estimates in a way that does not overwhelm retail users. If the experience works, it could open a new channel for mainstream traders to access on-chain derivatives. If it fails – through a security incident, a user error, or a poorly timed liquidation cascade – it could set back the broader push by mainstream brokers into DeFi.
eToro's next quarterly report, expected in October, will show whether the DeFi push has changed the trajectory of its crypto revenue. For now, the funding round signals that investors are willing to bet on infrastructure over immediate trading volumes. Extended has not disclosed its post-funding valuation.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.