Squid Raises $3.5 M in a Seed Round Led by North Island Ventures

• Squid, a DeFi lending protocol, raises $3.5 M seed funding.
• North Island Ventures led the rounds. 
• Squid provides cross-chain liquidity by connecting DEXs.

New developments in the crypto industry are always welcome; it helps bring them a step closer to mass adoption. In a North Island Ventures-led round, Squid, an Axelar-based protocol that connects users and developers via cross-chain liquidity, raised $3.5 million in seed funding. This would allow Squid to expand the team and add more supported chains. 

Other participants that Squid managed to beat were Distributed Global, Fabric Ventures, Galileo, Chapter One, and Noble Capital, where Axelar partakes as a strategic investor. 

Axelar network, a blockchain of connected blockchains, was introduced in 2021, allowing cross-chain communications. Meanwhile, Squid provides cross-chain liquidity connecting Decentralized Exchanges (DEXs) with more users in an understandable way, eliminating the security risk potential of cross-chain bridges. 

Theoretically, cross-chain liquidity provides more liquidity in borrowing and lending activities, simultaneously putting DEXs on the same page as Centralized Exchanges (CEXs). It should be noted that the FTX-saga had put a huge dent in the image. 

Axelar co-founder Sergey Gurbunov said in a press release:

“Failure of centralized platforms has highlighted the need for secure decentralized alternatives. Squid powers this future by enabling decentralized, secure, and simple-to-use cross-chain swaps.”

The protocol works by plugging into the existing liquidity on DEXs on supported chains to enable cross-chain swaps. This system is a kind of smart contract technology allowing exchanges of tokens between two different blockchains. As a service to developers, Squid provides an application programming interface (API) & a software development kit (SDK), along with bespoke widgets. 

Twenty-five chains are supported via Squid’s mainnet launch and include Ethereum, Moonbeam, Polygon, Avalanche, and many other Cosmos-based chains. Also, some DEXs that integrate Squid include QuickSwap, Pangolin, StellaSwap, SpookySwap, and Trisolaris. 

Recent times have revealed the underlying problem with centralized exchanges; the FTX debacle shook the whole industry to its roots. The contagion that followed affected many players deeply; some even had to join the bankruptcy club. The concept of the crypto industry and blockchain technology was to provide a decentralized financial system without a controlling entity. But sadly, most of them developed into centralized exchanges with a company or a firm looking over them. 

Although there is still no question about the technology and benefits the blockchain provides, all these bad instances were due to human error. Empowering decentralized exchanges (DEXs) is the need of the hour, as they eliminate centralization, the fundamental thing separating this sector from traditional finance. Moreover, a fully decentralized system is hard to achieve, and interoperability is a tough nut to crack along with scalability. Creating an ecosystem where such protocols can flourish could bring into reality Satoshi Nakamoto’s dream of decentralization. 

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.

Latest posts by Nancy J. Allen (see all)