DeFi The Liquidity Protocol loan platform has secured $ 6 million in Series A funding to expand its lending services in the chain, underscoring the continued growth of cryptocurrency lending.
The round of funding led Panther Capital, a crypto venture capital firm, with additional contributions from Nima Capital, Alameda Research, Greenfield.one and IOSG, the company announced on Monday. Angel investors, including Meltem Demirors, David Hoffman and Calvin Liu, also contributed to the increase.
Liquity received $ 6 million in Series A-funded funding @PanteraCapital.
Read the full announcement here: https://t.co/OhqrKT8N9x
– Liquity (@LiquityProtocol) March 29, 2021
Robert Lauko, CEO of the Liquidity Protocol, said the new round of funding “will allow us to continue Liquita’s mission to improve access to lending in the chain, eliminate interest rates and minimize administration in DeFi.”
Liquidity, based in Zug, Switzerland, provides interest-free loans for secured loans secured by Ethereum (ETH). Loans are repaid in LUSD, a stable dollar pegged to dollars, and require a minimum collateral ratio of 110%.
The company said its protocol would be launched on the Ethereum mainnet on April 5.
Although some of the hype has subsided, DeFi remains one of the hottest corners of the cryptocurrency market. More than $ 78 billion has been locked into DeFi protocols since Monday, according to on industrial data. As Cointelegraph recently stated, Binance Smart Chain – Native DApps lead the growth of the sector.
DeFi rental and leasing services It is expected to grow as the cryptocurrency market expands to new highs, forcing investors to defer capital gains taxes or use capital for contingencies. Microstrategy CEO Michael Saylor advocated the possession of cryptocurrencies – ie Bitcon – for 100 and more years and borrow against it to finance daily expenses.
Lauko says the biggest problems in the DeFi loan market are that “different interest rates and fees make DeFi loans quite unpredictable,” meaning “people pay a high premium for fixed interest products.” Borrowers are also willing to pay much higher interest rates so that they can borrow at a lower secured loan ratio.
“The goal of liquidity is to solve this problem by replacing variable interest rates with a one-off loan fee and at the same time improving capital efficiency through a minimum collateral ratio of 110%,” he said.