City Protocol Raises $11 Million: Will It Bring Hedging, Arbitrage, and Private Equity on-chain?

City Protocol aims to do more than just create another vault; it seeks to put "product specifications on-chain".

Written by: Grok

Assisted by: AididiaoJP, Foresight News

On August 26, City Protocol announced the completion of its seed and Pre-A funding rounds, raising a total of $11 million. The official post lists investors including Dragonfly, CMT Digital, Stratified Capital, Bitscale Capital, Adaverse, Mirana, and Jump, with the valuation undisclosed.

City Protocol serves as an on-chain infrastructure for structured products, previously known as the Solana launchpad Cooking City. It transforms neutral hedging, statistical arbitrage, and exchange margin lending strategies into purchasable shares, with the vault accounting for net value and redeeming at specified windows. Its flagship product is Venzo.

Issuer Statements Precede On-chain Totals

At 14:00 UTC on August 24, 2026, @cityprotocolHQ stated that the total vault reached $30 million; however, the Chinese press release on the 26th revised this to $40 million. Subsequent English reports indicated that the initial funding materials mentioned $40 million, but the external figure later adjusted to approximately $30 million.

The official Dune dashboard shows itemized data of approximately: JPEG Fixed-Rate Credit around $11.3 million, Pro Lend PLUS around $840,000, and Delta-Neutral Prime USD around $510,000, totaling about $12.68 million, which does not match any official integer. DeFiLlama currently lacks an independent protocol page. Until a comprehensive query is reproducible, both $30 million and $40 million can only be viewed as issuer statements.

The product list is based on the Venzo subscription page. As of around August 26, the page displayed four strategies that are either open or can be deposited:

• Delta-Neutral Prime USD (aprimeUSD, Liquid Alpha, 7-day window, showing net APR of about 10.80%)
• JPEG Fixed-Rate Credit (JUSD, 30-day window, showing net APY of about 11.8%)
• Affinity Quant Credit (AFUSD, officially launched on August 14, weekly interest payments, monthly rate adjustments, showing net APY of about 8.43%)
• Pro Lend PLUS (zUSDTPL, providing USDT to selected centralized exchange margin lending markets, showing net APY of about 8%, with Dune showing a lifecycle/annual return of about 2.21%)

The official press release summarizes these as quantitative hedging, cross-exchange arbitrage, and private credit. More accurately, they are neutral strategy shares, fixed coupon packaging, and exchange margin lending.

From Cooking City to Venzo: The Roadmap and Financing Overlap on the Same Subject

City Protocol was not initially positioned as a structured product protocol. Its predecessor was Cooking City on Solana (website cooking.city), a permissionless fair launchpad.

From May 29 to 30, 2025, Cooking City completed approximately $7 million in funding, publicly led by Jump Crypto, with participation from CMT Digital, Mirana, Bitscale Capital, and Everest Ventures Group.

At that time, the sale was based on the issuance mechanism: joint curve pricing, anti-front-running, Conviction Pool (issuers must pre-deposit funds to the contract as a commitment), and fees flowing back to developers and traders, with referral commissions. Concurrent reports indicated that the launchpad connected with Meteora liquidity, with cumulative purchases of about 400 SOL tokens allowing users to "graduate" to DEX; developer shares were locked via Streamflow. The platform also initially planned COOK points and airdrops, which are not the same circulating assets as the later $CP.

The official positioning of Cooking City was as a stress test. A lengthy article on January 5, 2026, stated: the launchpad was originally a meme issuance experiment, used to validate attention capture and community alignment; after the asset class was incomplete, the narrative shifted from "holding chips" to "holding rights", and the brand transitioned from Cooking City to City Protocol. The product timeline, according to official statements, is as follows:

• May 2025: Cooking City completed approximately $7 million in funding, still primarily a Solana launchpad.
• July 2025: Cooking City launch module officially went live. The official later stated it ranked in the top five among launchpads, with the RootData project previously ranked first.
• September 2025: Launched Totem Toy City during the Korea Blockchain Week and Token2049, using NFC physical toys to preheat "online IP to offline objects".
• October 2025: The brand upgraded from launchpad to City Protocol, rebranding as IP capital market infrastructure. City ID was launched concurrently. The official later stated that user verification exceeded 50,000 within weeks; the official roadmap indicated that by Q4 2025, City ID verification would exceed 51,000, ecological NFT holders would exceed 9,400, and the Korean community would exceed 1,400. The cooperation list included OKX Wallet, Hong Kong Comic Con, Animoca Brands, and Base. Cooking City did not disappear but was downgraded to an issuance module under City Protocol, continuing to use Meteora's dynamic joint curve.
• Q1 2026: Attention layer shifted to Base Mini-App and Viral City, with the official listing 19,000 generated videos and Cast interaction data; hosted Base Meetup during Hong Kong Consensus.
• Q2 2026: The official stated a high-value Neofinance custom deal was signed, with the attention module integrated into 26 Base projects, and Base Discovery for customer acquisition.
• June 18 to 25, 2026: Zenith audited venzo-contracts and the $CP contract on Base, with a report released on June 29.
• July 21 to August 31, 2026: Venzo launched the first season of Polis Points, with structured product counters open to users.
• August 14, 2026: Affinity Quant Credit went live.
• August 24, 2026: The official reported a total vault of $30 million.
• August 26, 2026: Announced a total of $11 million raised in seed and Pre-A rounds. Dragonfly, Stratified Capital, and Adaverse appeared on the new list; Jump, CMT, Bitscale, and Mirana overlapped with the May 2025 round. If the $7 million and $11 million are cumulative, the incremental amount for this round is about $4 million. The valuation remains undisclosed.

The commercial implications of this timeline are more substantial than the brand story. The funds in 2025 purchased issuance traffic and points users on Solana; the funds in 2026 purchase vaults, net values, and redemption windows on EVM. City ID, Viral City, and ecological NFTs remain customer acquisition layers; Venzo is a counter that migrates the same batch of users into locked product shares.

The token CP is planned to bridge two contributions: old issuance and attention points, and new vault positions. The $11 million raised in August 2026 must be contextualized within the $7 million from May 2025; otherwise, it risks misinterpreting a subject transformation as a purely asset management company's first institutional round.

Fee rights are written into the contract, while strategy risks are documented externally.

The tokenization layer converts revenue sources into distributable certificates. The vault layer uses pre-audited contracts to handle subscriptions, limits, accounting, and asynchronous redemptions, aligning with ERC-4626, ERC-7540, and ERC-7575. The issuance operation layer synthesizes product-level net values, rebalances, rates, and lifecycles. Venzo serves as the retail entry; wallets and exchanges can embed the same products through NaaS. City Protocol aims to occupy the issuance and distribution gateways.

Fee caps are already written into the contract: subscription and redemption fees do not exceed 20%, performance fees do not exceed 50%, and management fees do not exceed 10%. The caps represent the fee space, and the distribution may fall among the protocol, curators, and strategy managers.

In the audit report from security firm Zenith for City Protocol, it was mentioned that canceling redemption queue entries could lead to subsequent redemptions being permanently locked, with the report's records having been fixed according to hash. The audit covers vault accounting, asynchronous subscriptions and redemptions, permissions, and token contracts (Base address 0x85651a8838677248774914112b3d54df28fF7ae0).

The audit cannot cover CEX orders, margin liquidation, or counterparty credit.

AccountableData, integrated on August 13, can display collateral rates, configurations, real-time TVL, delta neutrality of hedging strategies, and reserves.

Disclosure reduces information asymmetry, but it does not alleviate liquidity discounts within the 7-day or 30-day windows. Jump and CMT Digital's main businesses are trading and market-making; what Venzo offers is a retail packaging of market-making, statistical arbitrage, and exchange borrowing needs.

Points Airdrop and Token Economics

The first season of Polis Points runs from July 21 to August 31. The benchmark is 1 point for holding a qualified position of $1 for one day, multiplied by a 3x vault point multiplier, position tier, Genesis, loyalty, and referral bonuses.

Position tiers take the lower value of the current qualified TVL and the 7-day time-weighted average. The Genesis batch entering from July 21 to 26 offers a 3x point bonus, which requires continuous holding for 21 days to redeem the excess portion. Referrals are structured in a single layer: the referred person receives a 5% bonus, while the referrer earns 15% of the referred person's daily Vault Factor.

The funding announcement came five days before the end of the points season. The redemption window locks funds, and the points clock locks behaviors, with the document not providing a formula for redeeming points for CP.

CP remains pre-issued. The early allocation is 35% for ecology, 20% for the team, 15% for the community, 15% for investors, 5% for liquidity, and 10% for the foundation. Around August 25, 2026, the document showed signs of revision, with investor and liquidity ratios increased and ecological reserves decreased.

Assets remain in user wallets, with programs adjusting positions according to public rules. Non-custodial does not equate to users owning the rules. Who publishes the adjustment schedule, how delayed the position data source is, who bears the slippage, and whether the rules can be unilaterally modified are the core ownership issues.

Team Background

According to public information, City Protocol only names two core members as co-founders. The official website states, "A team that has incubated leading crypto protocols," and the funding press release does not list a CTO, COO, or chief risk officer. The Dune dashboard includes a more specific self-description: the team has experience in family office fund allocation.

Jerome Wong (listed as Huang Ziquan in RootData's Chinese entry) is the founder, graduated from Peking University, and is based in Hong Kong. His Web3 experience is concentrated on the institutional side: from 2018 to 2025, he served as co-founder and chief business officer of Everest Ventures Group, while also participating in Animoca Brands as an investor, venture capital partner, and advisor; from 2021 to 2025, he was a co-founding partner of Adaverse and an advisor to Aspen Digital. His personal investment and advisory list includes projects like The Sandbox, Berachain, Afriex, Infinex, Moca Network, and Abstract Foundation.

Kyle Leungty is the co-founder. Messari lists both as Co-Founders; RootData also records him as a co-founder of Cooking City. On April 16, 2026, during a Base community founder AMA, he introduced the product, positioning City Protocol as the on-chain financial infrastructure layer on Base, emphasizing two components: the attention layer formed by Viral City and City ID, and the capital layer SDK encompassing vaults, exchanges, lending, deposits, withdrawals, and KYC.

The project claims its members come from Animoca Brands, The Sandbox, Dapper Labs, Memeland, as well as HSBC, MediaAsia, and LVMH.

Summary

The true trading rights of the strategy vault lie with external managers like Liquid Alpha, JPEG Trading, and Affinity. In other words, the "team endorsement" users see covers issuance and distribution; the profits and losses during the vault window are the responsibility of the strategy managers, not the project itself.

The subject has shifted from Solana issuance and attention layers to EVM vaults; how CP reconciles old points with new positions remains unanswered in the documents.

City Protocol first validated traffic through the launchpad on Solana, then embedded the specifications into Venzo's share contracts. The $11 million is the cumulative amount received, with the shelf holding hedging strategies, arbitrage ledgers, and exchange margin needs. The bell will toll in 7 or 30 days. Before the bell tolls, the integer of TVL is only accountable to the funding narrative; after the bell tolls, the net value payout is accountable to the holders.