After securing a $3.6 million seed funding round, Curvance, a decentralized finance (defi) platform, has surfaced from stealth mode.
Positioned as the “everything app” for decentralized finance, lending, and borrowing, Curvance seeks to tackle fragmentation challenges across various chains and protocols.
Curvance to tackle defi fragmentation
The seed round, conducted on Dec. 5, garnered support from over 20 decentralized autonomous organizations (DAOs) and prominent developers.
Noteworthy contributors from over 20 decentralized autonomous organizations and prominent developers. Among the backers were Offchain Labs, the developer of Arbitrum, cross-chain messaging platform Wormhole, and angel investors, including Sandeep Nailwal, Polygon co-founder.
Noteworthy contributors from various crypto projects — Scroll, Mantle, Eigenlayer, GMX, Curve Finance, Convex Finance, Balancer, Aura Finance, and Pendle Finance, along with DAOs like Frax Finance — participated in the funding.
Described as a defi “everything app” for lending and borrowing, Curvance aims to tackle fragmentation issues across chains and protocols.
The app, which is currently supporting Ethereum and Layer 2s like Arbitrum, Optimism, Scroll, Base, and Polygon zkEVM, Curvance taps into liquidity from decentralized exchanges like Curve, Balancer, Velodrome, GMX, and Pendle to enhance cross-chain capital efficiency. Polygon co-founder, Sandeep Nailwal highlighted Curvance’s potential to simplify Polygon DeFi participation, potentially streamlining onboarding processes.
Curvance has also revealed its plans to use the acquired funds for expanding operations, conducting security audits, and recruiting top talent in the defi market.
Co-founder Chris Carapola further stated that; With this funding round, Curvance will be able to expand on its value proposition of bringing forward a more approachable money market experience for both DeFi newcomers and experienced yield farmers and traders alike.
Co-founder; Michael Butcher highlighted the strategic approach in seeking funding, stating that; when they begin to seek funding, they had chosen to talk to their partners first, instead of just going to venture capital firms.
He further emphasized that this method resulted in a group of investors genuinely invested in Curvance’s long-term success.
In the broader context of the omni-chain money market sector, Curvance faces competition from projects like Radiant Capital. Built on LayerZero’s interoperability protocol, Radiant Capital currently supports lending and borrowing across Ethereum, Arbitrum, and BNB Chain, following a $10 million investment from Binance Labs in July.
However, both Curvance and Radiant Capital could encounter challenges if established DeFi lending platforms like Aave and Compound also venture into the same niche.
Defi dynamics and regulatory challenges
Recent reports indicate that the defi sector currently holds a valuation of approximately $44.1 billion, with expectations of a compound annual growth rate (CAGR) of 46% from 2023 to 2030.
Noteworthy trends in defi for 2023 encompass decentralized exchanges (DEXes), increased integration between defi and traditional finance, the rise of governance tokens, and the traction gained by decentralized insurance.
The resurgence of yield farming had also served as a strategy to attract new users to DeFi, while the demand for leverage remains a significant source of high yields. However, the sector’s long-term stability hinges on achieving regulatory clarity.
The U.S. Securities and Exchange Commission (SEC) has actively monitored the defi space, issuing statements addressing the associated risks, regulations, and opportunities. In response to the growth of defi platforms, the SEC has proposed an expansion of the term: exchange, to encompass a broader scope of trading activities within the U.S.
Despite these regulatory initiatives, the crypto industry has been vocal about the SEC’s proposed regulations.
Some argue that these rules could infringe on the First Amendment rights of developers and perpetuate the SEC’s historical oversight issues in adapting to this innovative sector.
The SEC possesses various tools, from rulemaking authority to enforcement actions, aimed at ensuring fair market activity and providing all investors with an equitable playing field.