Delphi Digital Leads $5M Seed Round for Money Market Protocol ZkLend

ZkLend, a furniture 2 wealth marketplace protocol built connected zero-knowledge rollup product StarkNet, has raised $5 cardinal successful a effect backing circular led by crypto probe steadfast Delphi Digital and with information from Three Arrows Capital and StarkWare. The superior volition spell toward the motorboat of the company’s halfway products, arsenic good arsenic to expanding the technology, selling and concern improvement teams.

“Money markets are a halfway constituent of the [decentralized finance] fiscal stack with beardown existing merchandise marketplace fit. Couple a wealth marketplace with the method prowess of StarkNet’s decentralized ZK rollup, which is unrecorded and proven, and you person zkLend,” said Delphi Ventures co-founder and spouse Tom Shaughnessy successful a statement.

StarkNet is simply a furniture 2 merchandise that addresses Ethereum’s cardinal scalability issues of dilatory throughput and precocious transaction fees. ZK rollups bundle hundreds of mathematically validated transactions into one, past constitute that transaction to the Ethereum blockchain, cutting down connected postulation and fees.

StarkWare, the genitor institution of StarkNet, raised $50 million successful backing astatine a $2 cardinal valuation past November.

ZkLend has 2 cardinal products. Artemis, a permissionless lending offering unfastened to anyone with an net connection, volition motorboat successful the 3rd 4th of 2022. With Artemis, users tin deposit assets to gain output and tin get utilizing those assets arsenic collateral. Deposits from aggregate investors are collected successful pools to facilitate the loans, which person real-time, liquidity-variable involvement rates.

The Apollo product, launching aboriginal adjacent year, is for organization and firm users needing know-your-customer (KYC) and anti-money laundering (AML) compliance. Institutional investors see fiscal institutions, prop shops (a benignant of trading steadfast that invests its ain money) oregon adjacent firm treasuries, zkLend co-founder Jane Ma said successful an interrogation with CoinDesk.

“As [decentralized finance] becomes much mainstream and institutions commencement looking into adoption, we recognize that there’s going to beryllium a batch of compliance barriers that travel into play. Apollo tin service arsenic a gateway for these institutions,” said Ma, noting that institutions person to beryllium verified and approved earlier entering the protocol.

ZkLend’s investment deck further outlines the value of organization investments successful crypto: “The adjacent section of DeFi is institutional. Institutional CeDeFi is the adjacent concern paradigm arsenic organization superior and bequest infrastructure participate the arena.”

ZkLend is backed by the autochthonal ZEND token. Users who get oregon lend assets wrong Artemis tin gain tokens successful what zkLend calls an “ouroboros” model, named aft the mythical snake that eats its ain tail. Users who involvement ZEND volition beryllium eligible for governance rights and claims to the involvement income earned by the deposit pools.

“We privation to reward borrowers due to the fact that they’re the ones paying involvement connected their loans,” explained Ma. “If you’re borrowing successful immoderate of the pools with higher involvement rates, we truly privation you to enactment and we mightiness connection a much charismatic reward.”

ZkLend plans to usage the caller superior to physique retired the team, including a main compliance serviceman and organization income radical for Apollo. Ma said the protocol volition prosecute 2 to 3 developers since StarkWare doesn’t natively enactment Ethereum Virtual Machine, which means the rollups person to beryllium done done Cairo, a comparatively caller programming language

StarkWare isn’t the lone furniture 2 ZK rollup platform. Competitors see zkSync from Matter Labs, arsenic good arsenic Polygon Hermez. Last summer, furniture 2 Ethereum level Polygon merged with decentralized ZK rollup level Hermez successful a $250 cardinal deal successful a large motion of enactment for ZK technology.

So what led zkLend to take StarkWare?

“We decided to spell with StarkWare due to the fact that we thought they were the farthest successful presumption of improvement advancement and we felt the squad was highly experienced,” said Ma. “That’s not to accidental successful the aboriginal we won’t look astatine different ZK furniture 2s.”