DEFYCA, a Luxembourg-based digital securities platform, has raised $1.3m in a seed funding round to build the next generation of decentralised capital markets.
The round was led by QBN Capital and Blizzard Fund.
DEFYCA aims to make private credit investment more accessible and more cost-effective.
The company has developed a blockchain protocol that enables digital and crypto investors to invest in traditional debt securities and loan portfolios via tokenised assets.
By bridging DeFi (Decentralized Finance) and TradFi (Traditional Finance), DEFYCA said it is “solving problems from two worlds.”
Accroding to DEFYVA, the DeFi market is commonly known for its volatility, and there are only a limited number of ways to invest stablecoins in the short-term, while retaining a stable secured yield. Moreover, in the TradFi credit market, continuous trading is non-existent. This is a direct result of its lengthy, complex, and manual processes.
DEFYCA said it is resolving these traditional market gaps.
On the DEFYCA protocol, tokenised assets are issued, securitised, and structured into liquid pools, which can be traded instantly and with no friction. Price discovery, liability matching, settlement, and payment flows are executed automatically through smart contracts.
The result is a significant reduction in both investment costs and time for the issuer. It also offers investors the opportunity to earn tangible secured returns on stablecoins.
The company said the seed funding will be used to launch the protocol and take the product to market, taking advantage of the growing interest in digital securities and decentralised finance from the traditional finance industry.
DEFYCA will launch its mainnet in Q1 2023
Pat Hourigan, co-founder of DEFYCA, said, “Our goal is to provide access for investors to invest frictionlessly in the private credit markets, whilst providing debt funds with a fully-digital end-to-end infrastructure built on blockchain technology. The DEFYCA protocol is built using existing, proven, resilient, scalable, high-performance infrastructure, connected with digital and crypto financial markets.”
Earlier this year, Uniswap, which has built a decentralised crypto trading protocol, raised $165m in its Series B funding round.
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