Crypto lending platform Algofi raises £2.1m before December launch
New cryptocurrency lending platform Algofi has secured $2.8m (£2.1m) in seed funding, ahead of a December launch.
The funding round was led by Union Square Ventures, Arrington XRP Capital and Pillar VC, with participation from Y Combinator, Formulate Ventures and Shine VC.
Algofi, which is built on the Algorand blockchain, enables customers to lend and borrow cryptocurrency, and earn interest on their deposits.
It is building fiat currency payment “rails” so that users can transfer their funds seamlessly.
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“Decentralized lending opens the door to the new financial system, but one of the barriers for participants has been high transaction costs and slow networks,” said John Clarke, co-founder at Algofi.
“Because Algofi is built on Algorand, we can offer transactions that cost less than $0.01, compared to $15 or more on other networks. In the long term, we can trust our protocol will scale with the growing number of transactions as the retail and institutional communities embrace DeFi.”
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In the long term, Algofi has revealed aims to become the first “crypto-native bank”.
“While Algofi is starting with lending, our long-term goal is to be the first crypto-native bank that bridges the gap between centralized and decentralized finance,” said Owen Colegrove, co-founder of Algofi. “Over the next decade, we look forward to playing a significant role in helping millions of people around the world take part in the growing DeFi ecosystem.”
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