A marketplace pioneering the use of financial NFTs in cryptocurrency lending has been backed by a prominent Silicon Valley VC.
SLVC, which has helped numerous startups get acquired by companies like PayPal, Apple, Facebook, and Google, has put seed funding into Pledge Finance.
Pledge says its marketplace for Bitcoin loans will help bring decentralised finance lending to everyone, including non-savvy investors, so that they can diversify their crypto portfolios into assets such as real estate, and also find tailored loans that fit their risk profile.
Its investment will help fund initial liquidity pools, increase Pledge’s marketing budget and drive early adoption of the project.
“Volatility plagues DeFi,” David Lee from SLVC said. “And Pledge will help offer risk-averse users some stability. This, plus the ability for commercial parties to find tailored loans quickly on a decentralised platform, we believe, will revolutionise the DeFi space. ”
Pledge is the first DeFi project to focus on fixed-rate loans and interest rate swapping. It uses financial NFTs, an innovative new application of crypto technology, to represent lending contracts.
Packaging those contracts in self-executing tokens allows users to easily speculate and swap interest rates as well as mint fixed-rate products like bonds. This allows regular users and large companies to find loans and rates that fit their needs on a decentralised, permissionless platform, whether they want a rate that is riskier and variable, or one that is stable and long-term.
Pledge co-founder Tony Y. Chan said: “We are proud to have SLVC on board, and glad they see the value of investing in the interest rate swapping market.
“This market represents trillions of dollars in the legacy financial system and is still ignored in DeFi.
“Bringing interest rate swapping to DeFi will boost the entire ecosystem and make it possible for massive capital to enter those markets.”