Interesting to see that last week several large funding rounds have been completed in the blockchain space; Lending protocol Compound Finance just raised $25 million in a round led by Andreessen Horowitz’s a16z crypto fund, marking one of the largest venture capital investments in a decentralized finance (DeFi) startup to date.
Much like MakerDAO’s loans, users can take collateralized loans with ethereum-based tokens, with the locked assets automatically liquidating if an independent “oracle” determines the price has dropped too low. Unlike MakerDAO loans, however, the Compound protocol supports multiple assets and allows people to lock up assets without borrowing. Because these assets are stored in a shared pool, even someone with liquidated collateral could claim tokens if they are able to repay the general pool. Compound founder Robert Leshner said that so far “teams in crypto that have stockpiles of DAI and crypto” are the most frequent protocol users. This appears to correlate with investors’ interests. Leshner said this recent round will help the San Francisco-based company further “decentralize” the protocol by setting it up so that crypto exchanges and custodians, like Coinbase, can maintain the protocol going forward.