The latest decentralized finance (DeFi) protocol to gain big venture capital backing is Unbound Finance with its aim to improve yields from liquidity provider tokens.
Unbound has raised $5.8 million from a long list of venture capital firms including CMS Holdings, Hashed, LedgerPrime, LD Capital, TRGC, ArkStream Capital, ZeePrime Capital, Future Perfect Ventures, Brilliance Ventures, Woodstock, Coin98 Ventures, and GenBlock Digital.
The firm aims to offer the first ever decentralized cross-chain stablecoin and develop cross-chain bridges for the transaction of synthetic assets according to the announcement. CEO and Founder of Unbound Finance, Tarun Jaswani, elaborated:
“AMMs are DeFi’s Zero to One Innovation and we are building an aggregator layer to enable greater yields & capital efficiency for our users,”
Improving LP Yields
Unbound Finance is a essentially a decentralized liquidity protocol that aims to tackle the issue of liquidity provider token liquidity efficiency. It enables users to compound their earnings from LP tokens by using them as collateral to mint synthetic assets.
Pantera Capital CEO, Dan Morehead, said that Unbound has a great potential to play a lead role in the DeFi space by focusing on liquidity pool tokens. Polygon co-founder Sandeep Nailwal stated:
“Unbound’s dedicated development team has created something that makes all AMMs efficient and will make interesting money legos in the space further.”
Unbound will also support a range of synthetic assets, such as uETH, and its own stablecoin, UND. Liquidity pools will be sourced from various AMMs offering better yields, and the platform will offer tools to enable users to compound these yields using independent price feeds and data oracles.
The protocol first went live on Ethereum and also supports AMMs like Uniswap, Balancer, MooniSwap, and Sushiswap. It intends to expand strategic partnerships with EVM-compatible blockchains to include Binance Smart Chain, Polygon, and Harmony which will add support for PancakeSwap, and DFYN among others. It has already integrated Uniswap v3 and is in the process of launching aggregator contracts for concentrated liquidity provision
Unbound’s “DeFi Treasury For Liquidity Pool Tokens,” first went live on testnet in December 2020 and launched its final phase testnet in April 2021.
DeFi TVL outlook
At the time of writing, DeFi total value locked was hovering around $75 billion according to DappRadar. It hasn’t managed to recover to its three-figure peak in mid-May but has remained relatively stable for the past three weeks despite the market correction.