India-based DefiDollar has raised $1.2 million in a seed spherical led by Divergence Ventures, Normal Crypto and Confederate. The purpose: to const
India-based DefiDollar has raised $1.2 million in a seed spherical led by Divergence Ventures, Normal Crypto and Confederate. The purpose: to construct an index for hedging the dangers related to various kinds of stablecoins.
DefiDollar believes customers have to diversify dangers via a stablecoin aggregator. Take, for instance, the censorship dangers related to stablecoins like USDC and USDT which are fiat-backed and issued by recognized entities. Conversely, crypto-collateralized stablecoins like dai might face smart-contract dangers and have a tendency to see slight fluctuations in worth that make them much less secure than they could sound.
That’s the place DefiDollar and its “metastable” DUSD token is available in.
“It’s an insurance coverage layer over present avenues in DeFi,” co-founder Siddhartha Jain advised CoinDesk. “There are plenty of completely different dangers which are current within the ecosystem, the identical form of dangers which banks pose as a result of the issuing entity is centralized or in all probability has blacklisting mechanisms.”
Born of the ETHGlobal HackMoney hackathon in Could 2020, DefiDollar launched right into a dwell product on the Ethereum mainnet in six months and presently handles $three million in quantity, Jain mentioned. DUSD is collateralized by Curve Finance LP tokens, in keeping with the venture’s documentation.
The corporate just lately introduced a governance token, DFD, that will probably be distributed via a liquidity mining scheme known as Preliminary Liquidity Mining Providing (ILMO). The DFD ILMO is about to go dwell this week.
“Different initiatives often do their liquidity mining primarily based on ETH or one other stablecoin,” mentioned co-founder Arpit Agarwal. DefiDollar customers can use the venture’s native stablecoin, DUSD, to generate DFD rewards.
Not like different token launches, customers can declare this preliminary provide by depositing DUSD after which play a three-day ready sport for the token to launch in full.
DefiDollar co-founders advised CoinDesk that after this timeframe, they count on there to be a major quantity of liquidity on the staked tokens when DFD formally launches subsequent week.