DeversiFi, a decentralized finance (DeFi) exchange with a focus on scaling solutions, has raised $5 million in funding from Parafi and several others. The funding will go towards new features and tools.
Other participants in the fund round include Defiance Capital, Lightspeed Venture Partners, Delphi Ventures, and Blockchain.com.
DeFi and Ethereum scaling
The new funding will be used for various initiatives relating to scaling solutions for DeFi trading on the Ethereum (ETH) network. DeversiFi already provides users with a cheap and fast solution to trading on Ethereum, with a particular emphasis on DeFi. Besides offering quick and gas-free swaps, it also features private transactions and competitive fee rates.
Will Harborne, Co-Founder of DeversiFi, said that scaling was important in helping lower accessibility to DeFi,
“We are creating a hub to invest, swap, send, and lend tokens without the friction and cost of Layer 1. As more users onboard we see integrations with centralised exchanges as being important to lower the barriers to accessing L2 DeFi.”
The funding will go towards Layer-2 automated market maker (AMM) pools, liquidity mining, and tools to make DeFi more accessible.
DeversiFi also launched its governance token, DVF, in March of this year. 50% of these tokens will be distributed via liquidity mining and other possible initiatives.
The DeversiFi exchange has steadily been increasing its monthly volumes, partly thanks to partnerships with the likes of ConsenSys, Starkware, and Ledger. Starkware’s zkSTARKS mechanism is what grants scalability on the platform. The team claims that this led to a 133% growth in organic users.
Ethereum plagued by high gas fees
Ethereum has been having a difficult time when it comes to gas fees, though that hasn’t stopped activity as much as one might think. DeFi transactions during peak times can cost hundreds of dollars, but during quieter hours, fees are significantly less. While this has somewhat dampened activity in the market, users are still trading.
The development of ETH 2.0 has steadily been moving its way toward a full release, but it has yet to fully tackle its scalability issues. There will likely be some more scalability improvements as more phases are rolled out.
Meanwhile, several teams are individually working on their own solutions, whether it be Rollups or sidechains. Other networks, like Binance Smart Chain and Fantom, are also doing well and serve as alternatives. Ethereum remains the dominant network but could lose some market share to other burgeoning networks.