DeFi lending protocol JellyFi has closed its seed funding round on $4.4m, as it gears up for technology development push.
Lemniscap served as the lead investor, with commitments also coming from ParaFi Capital, Tioga Capital, White Star Capital, DeFiance Capital, True Ventures, Digital Currency Group, Genesis, Divergence Ventures and AngelDAO. The round was also supported by several unnamed angel investors.
This capital injection will be used to help the FinTech company bolster its R&D efforts, make several key hires, and perform multiple audits.
Founded in 2021, JellyFi was created to address capital inefficiencies within the DeFi lending market. It claims that institutional borrowers, including dApps and protocols, have trouble meeting short term and recurrent liquidity needs through crypto loans. Typical DeFi lending, JellyFi said, requires a borrower to overcollateralize their loans, which is a blocker for the majority of borrowing use cases.
Through the JellyFi platform, borrowers are taken through a vetting process before they are whitelisted. Once approved, the platform only uses one liquidity pool per each borrower. The borrower can then pick instant loans through JellyFi’s bid order book and will not need to have any collateral in order to meet their needs for recurrent and short-term liquidity.
As for lenders, JellyFi helps them conduct their own risk assessments, choose who they want to lend to and specify their lending rate.
ParaFi Capital managing partner Anjan Vinod said, “Uncollateralized lending is a massive market opportunity for DeFi. JellyFi’s uncollateralized protocol aims to bring capital efficient credit markets to DAOs and institutions across DeFi and CeFi.
“Through a decentralized whitelisting process, any protocol can tap into JellyFi’s liquidity pools with flexible borrowing terms. We’re excited to support JellyFi’s journey in becoming a liquidity backbone for DeFi.”
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