Clipper, a new decentralized exchange (DEX) that caters to retail traders, closed a $21 million funding round on Tuesday. 

Olaf Carlson-Wee’s Polychain Capital led the $4 million equity round and participated in the $17 million liquidity round. Other investors included 0x Labs, DeFi Alliance and MetaCartel DAO.

Clipper, which launched on June 30, uses a novel automated market maker (AMM) that promises to offer guaranteed best prices for retail-sized trades, which are typically under $10,000. 

As more centralized crypto exchanges compete for market share, trading fees are facing downward pressure. Top exchanges like Coinbase, which is notorious for its high trading fees and derives most of its revenue from those fees, are competing with no-fee and low-fee crypto trading platforms, like Robinhood.

According to Mark Lurie, the CEO of Shipyard Software (the company behind Clipper), most of the other low-fee and no-fee crypto exchanges have hidden costs baked into trades or other “catches” like the time limit on free trading at Crypto.com or KuCoin, and the need for a native token from decentralized exchange Digix. 

Clipper’s relatively small $20 million liquidity pool means that it can’t effectively serve whales (those with large crypto holdings) or institutional traders, but that is what allows the DEX to keep fees low.

“We believe that Shipyard is beginning with a genuinely innovative approach by targeting small to medium-sized traders, not whales,” Carlson-Wee said in a statement. “Shipyard’s tech will fill a desperately needed void of DEXs that cater to retail traders.”