Our investment in JellyFi

We are excited to announce our seed investment in JellyFi, a capital-efficient DeFi lending protocol that enables crypto loans without collateral. We are joining this round led by our friends at Lemniscap and many others.

At a high level, we believe that the uncollateralized lending market is one of the ripest areas for DeFi growth over the coming years. There are several fundamental advantages that we believe position JellyFi to be the market leader in uncollateralized lending.

Choose your Borrower

Current uncollateralized lending protocols pool borrowers together. You lend your money out and it is distributed amongst a number of different borrowers, each with their own strategies and risk profiles. With JellyFi, each liquidity pool may only be used by one borrower. We believe this will allow institutional investors to carry out more precise risk assessments on their lending, and will remove risks from governance processes used to delegate funds from the pool. Current governance practices used by pool-based platforms are in fact rather primitive, often consisting of a brief forum post, and could become an attack vector in the future.

From the borrowers perspective, this is an improvement in that once whitelisted and set up with a pool, borrowers are able to instantly borrow and repay up to the pre-defined limits of that pool with no additional governance process or wait times.

Yield Optimization

When lenders are waiting to be paired with a borrower, their liquidity is routed into a large lending platform such as Aave (or a potentially a lending aggregator such as Morpho). This can serve to create a fair “wait list” in the event that there are more lenders than borrowers, without lenders losing opportunity cost. After lenders are matched with a borrower, they realize the designated rate for that pool.

Integrations

JellyFi is well positioned to make a number of exciting integrations, in addition to the yield optimization integrations touched on above. One example is Superfluid, a streaming payments protocol.

https://twitter.com/Superfluid_HQ/status/1471528232788930570

--

--

--

Distributed systems investment collective.

Love podcasts or audiobooks? Learn on the go with our new app.

Recommended from Medium

BTC to USD

Wyre’s 2019 Recap

Bitcoin guide: What is Bitcoin and how do you buy it?

Hello done swap community we are pleased to announce that 1,000,000 Done swap token have been…

An In-Depth Look Into Toyz Token

How celebrities are jumping onto the metaverse hype train

How is Bitcoin developed and who is involved?

What is Tokenomics

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
AngelDAO

AngelDAO

Distributed systems investment collective.

More from Medium

Arkius: Bringing Order to the DeFi Wild West

Steer’s Financial Platform

Alt VC: Is Crypto Democratizing VC?

Durafi — Decentralized Exchange For the Trading of Cryptocurrency Indices