$22 Million Raised by Defi Protocol iZumi Finance in Unique Way

Singapore-based iZumi Finance, a multichain Decentralized Finance (DeFi) protocol, raised $22 Million in a funding round in a unique way. The company issued iZumi zk-Fund via strategic partner Solv Protocol, a semi-fungible token (SFT). On May 20, 2020, the protocol raised $30 Million through the sale of bond vouchers. 

iZumi Finance Raises $22 Million 

iZumi Finance, a DeFi protocol deployed on Ethereum, BNB chain, Polygon, and Arbitrum Blockchain, raised $22 Million in a funding round with Unicode Digital, NextGen Digital Venture, Bella Protocol, Incuba Alpha, etc. as investors. The raised amount is supposed to provide liquidity for the company’s on-chain order book Decentralized Exchange (DEX), iZiSwap Pro, available on zkSync Era Network. 

Interestingly, the funding round was different from the typical cash-in-equity-out arrangement. They issued the zk-Fund SFT, and the investor purchasing the fund would get the SFT in their wallet, representing their share. This arrangement makes them the limited partner of the fund upon maturity. Investors can redeem these SFTs for their principal. 

The protocol offers a one-step “liquidity-as-a-service,” converting one digital asset into another or cash. Currently, the total value locked (TVL) on the platform is $25.16 Million, with a token price of $0.02573. 

iZISwap Pro is the new product which is an Automated Market Maker (AMM)- drive order book decentralized exchange. The company says it reduces the transaction cost and mitigates the custody risk of similar products on the market. 

On May 20, 2023, iZumi Finance raised $30 Million by selling bond vouchers and claims on iZumi Bond USD (iUSD); TVL then was around $58 Million. They also announced the launch of the new iZiSwap DEX, involving a new AMM protocol, and uses iUSD tokens. iUSD is pegged 1:1 with the US dollar and, like a stablecoin, is backed by iZumi’s collateral and futures revenue. 

The funding involved $20 Million from institutional investors like Ivy Ventures, Cobo & Mirana, etc. More than half of the amount came from voucher sales on the bond-focused Solv Protocol. Additionally, $4 Million BUSD worth of vouchers were sold, plus an additional 5,000 BNB worth $2 Million. 

iZiSwap exchange is built around decentralized liquidity automated market maker (DLAMM). AMM is a protocol that powers the decentralized exchange, and the decentralized liquidity part is a bit complicated. The company says that DLAMM optimizes the providers’ price ranges and amount of liquidity. 

The final result of this arrangement is the lack of slippage, which is a difference between the expected price and the executed price in a transaction. 

Other DeFi Protocols Getting Funded in 2023

LayerZero, a cross-chain interoperability protocol, closed a Series B funding round with $120 Million in April 2023. Scroll ZKP, the native zkEVM scaling solution for Ethereum, raised $50 Million in March 2023. Eigen Layer, a $ETH scaling solution, also managed to raise $50 Million in March 2023. 

Fetch.ai, an AI-focused blockchain platform, secured $40 million in funding in late March 2023. Sei Network, a layer 1 blockchain built with the Cosmos SDK, raised $30 Million in two funding rounds on April 11, 2023. 

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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