Hashstack Finance, a DeFi lending platform, recently secured $1 million from its latest seed funding round. The funding came after the completion of its Open Protocol testnet. Moonrock Capital, GHAF Capital Partners, Kane & Rao Group, Nimrod Lehavi, MarketAcross, and Chainridge Capital all took part in the seed funding.
The lending platform has outlined how it will use the newly-raised funds. Hashstack will use the bulk of the money to develop the Open Protocol. In addition, it will deploy the rest towards attracting top talents to the platform. Hashstack’s Open Protocol benefited from Harmony’s $300 million Ecosystem Fund late last year.
According to Vinay, Hashstack’s founder, “Bringing under-collateralization to the DeFi is critical to our mission at Hashstack. We are grateful to be backed by some of the smartest money in this ecosystem. The funds raised will be utilized towards talent acquisition, product development & growth.”
Kevin Kurian, General Partner at Kane & Rao Group, remarked that Hashstack’s idea about users’ assets was why it took part in the funding round. According to Kurian, “Hashstack offers a solution that the market has not really seen before. We backed Vinay and his team at Hashstack with our capital to bring forward these new ideas.”
What Is Hashstack’s Open Protocol?
Hashstack aims to offer a unique lending system to its users. Hashstack’s Open Protocol addresses collateral requirements. It focuses on the over-collateralization of loans. Furthermore, Open Protocol, based on the Harmony blockchain, allows borrowers to take out loans with a collateral-to-loan ratio of up to 1:3. Also, users can borrow up to three times their collateral and withdraw up to 70% of the collateral value. Users can trade on the platform with their remaining funds.
Furthermore, Hashstack believes that DeFi lending is over-collateralized. Borrowers often provide a minimum of 42 percent extra collateral against the loan they want to take out. This problem has plagued other lending platforms like Aave, Maker, and Compound. However, Open Protocol works towards granting users quick access to funds for whatever reason they need it.
Hashstack Plans to Change DeFi
Hashstack Finance has caught the attention of several project leaders. Simplex CEO Nimrod Lehavi believes in Hashstack’s ability to cause a change in DeFi. He said, “Hashstack has the potential to be one of the pioneers of Layer – 3 enabler solutions.”
In addition, Hashstack has made it easy for its users to quickly connect with other DeFi platforms such as PancakeSwap. Such integrations aim to simplify in-app market swaps and boost loan utilization. Also, borrowers can use this technique to exchange borrowed tokens for other primary or secondary coins without switching dApps. Furthermore, Open Protocol bridges assets from other platforms such as Ethereum and Avalanche C-Chain access.
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