Polkadot-Powered Parallel Finance Raises $22 Million for DeFi Products
More venture capital funds are flowing into decentralized finance (DeFi) protocols with Parallel Finance becoming the latest to secure a multi-million dollar funding round.
In an announcement on Aug 30, Polkadot-powered Defi lending and staking protocol Parallel Finance said that it had raised $22 million in a Series A funding round that valued it at a cool $150 million.
The round was led by Polychain Capital with participation from the usual industry investors including Lightspeed Venture Partners, Slow Ventures, Blockchain Capital, and Alameda Research.
It’s one of the largest funding rounds on Polkadot’s Kusama network according to Parallel and follows a $2 million pre-seed round for the protocol in June.
More DeFi to Polkadot
Parallel plans to bring more DeFi to the Polkadot ecosystem by providing a suite of automated market making, staking, auction loans, and derivatives trading for the network and its testbed blockchain Kusama.
Project founder Yubo Ruan commented on the institutional backers revealing that they are heavily invested in the Polkadot ecosystem:
“The reason that we bring a lot of investors – especially Polychain leading the round – is because they are one of the largest DOT holders and Kusama (KSM) holders. They want to have yield in this space, they want to have use of DeFi protocols”
Late last week, Parallel announced the launch of its crowd loan campaign to compete for a Kusama parachain slot. Its sister network Heiko Finance will be the parachain that it hopes to launch on Polkadot’s “Canary Network.”
Ruan elaborated that DOT and KSM holders are faced with a dilemma between lending and staking. A lending rate that’s higher than the staking rate will result in tokens being unstaked while the opposite will result in holders staking DOT.
As its name suggests, Parallel Finance aims to overcome this issue by offering “parallel interest” using a lending protocol that allows holders to borrow assets on top of their staking derivatives.
The protocol will use the funding to expand its team from the 20 staff that it currently has. There will also be expanded into multi-chain ecosystems, stated Ruan who added:
“Polkadot is one of them that will do well, Ethereum is going to do well too, Solana is going to do well. Whenever we find problems in the space related to DeFi,”
DOT and KSM price updates
Polkadot’s native DOT token has gained 6.5% since open to reach $27.70 according to CoinGecko. DOT has gained 60% over the past month but remains 45% down from its May 15 high of $49.35.
Kusama’s KSM token, which is used to stake in the parachain auctions, is up by nearly 17% on the day, trading for $350. KSM surged to $622 in mid-May but is currently down 43% from those heady heights.
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