New investors for blockchain startup Liquity

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02.10.2020
Ethereum

Liquity, offering a decentralized protocol that provides interest-free liquidity against Ether, has raised $2.4M in seed funding. Led by Polychain Capital, the proceeds from the round will support the company’s growth and development.

Incorporated in 2020 in Baar (Zug), Liquity is building a borrowing protocol for Ethereum that will issue interest-free loans (called “troves”) in its USD-pegged stablecoin, LUSD, to borrowers. Due to the volatility of Ethereum, users have to deposit more value in crypto than they borrow in stablecoins. In the case of Liquity thes minimum collateralization ratio is 110%, which is much lower than usual. The low ration is made possible by a novel efficient liquidation process for troves that fall below the minimum ratio. The protocol is fully algorithmic without any human governance, relying on a decentralized network of financially incentivized front end operators.

To further grow its platform, Liquity has raised $2.4M in its seed round led by Polychain Capital, with follow on investments from a_capital, Lemniscap, 1kx, DFINITY Ecosystem Fund, Robot Ventures (Robert Leshner), and Alex Pack. The new investors join Tomahawk.VC, who led Liquity’s pre-seed round earlier this year.

“Liquity is thrilled to have investors on board who support our mission of improving access to on-chain borrowing, reducing interest rates, and minimizing governance. This round brings along a deep bench of advisors who have participated in some of the most exciting DeFi protocols to date. Besides, several of our investors have committed to help bootstrap the network and plan to be active users of Liquity’s products”, states Robert Lauko, Founder and CEO at Liquity in his Median blog.

This announcement comes after Liquity entered a partnership with Gauntlet, developer of a blockchain simulation and testing platform that leverages battle-tested techniques from other industries to emulate interactions in crypto networks. Liquity has engaged Gauntlet to simulate and stress test its system with its complex incentive mechanisms.

(Press release/RAN)

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