Union, a decentralized finance protocol, has completed a funding round for the development of a global, permissionless credit network base for Ethereum-based platforms.
Union is a little different from the majority of DeFi protocols in that it works without the need for collateral or any of the things associated with traditional lending and borrowing, such as credit scores or proof of identity.
The funds raised total $3 million, and the investments have come from a number of big names in the industry;
“We are excited to be backed by Placeholder, 1kx, CoinFund, Distributed Global, Spartan Group, Variant, KR1, Scalar, Defiance, and Infinite Capital.”
As reported by Altcoin Buzz, a new DeFi platform called Yield has also completed a successful seed round, raising almost $5 million.
DeFi: A Zero Sum Game?
In its latest announcement, Union stated that it plans to address the current problem with DeFi in that it is only accessible to the rich that already have the collateral to deposit.
The blog post added that DeFi is largely a zero-sum activity, in that in order to gain, someone else must lose, and in order for such an asset-backed economy to grow, new buyers must constantly be sought.
This has clearly been evidenced with the whales growing fatter while smaller players get squeezed out, leading to an “ossified economy,” as it has been called.
The protocol intends to alleviate these issues by allowing users to create their own “circles of trust” which can include friends and family. Members of these groups can then borrow funds from a collateral pool whenever needed without having to deposit collateral themselves.
The protocol is currently in an alpha testing phase and also offers stablecoin staking in order to earn UNION tokens. It did not give much else away, such as an official launch date, and ended the announcement with a mission statement;
“It is our mission with Union to provide the means for DeFi to evolve into a more positive-sum economy; capable of lending funds natively to builders, communities, and friends.”
DeFi TVL at All-Time High
In other related DeFi news, the total value locked across all platforms has reached a new high of $15.9 billion, according to Defipulse.com.
Over a billion dollars has been added to the TVL figure this week, though this is likely to be because of Ethereum price increases rather than new capital inflows.
The amount of Ethereum locked in DeFi remains at just over 7 million ETH while there is 142,600 BTC locked across various protocols. Maker remains the top DeFi protocol by TVL with $2.8 billion, giving it a market share of just under 18%.
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