Institutional DeFi Platform dAMM Raises $2M in Private Token Sale Round

By Decrypt Staff

Institutional DeFi lending platform dAMM Finance has completed a private token sale round of $2 million, the company has announced.

Participants in the round include Prismatic, WOO Network, LedgerPrime, Fisher8, Concave, Berachain and System 9, Inc.

"Raising funds during a bear market is quite an uphill task especially for crypto projects," a spokesperson for dAMM Finance said, calling the success of the raise "proof and testament to [dAMM's] capability and potential."

Launched in September, dAMM is an uncollateralized lending platform for any token with algorithmically determined interest rates. Market makers and investors can borrow on dAMM from any token with a liquidity pool on the platform, including stablecoins such as USDC, DAI, USDT and LUSD, as well as tokens like AAVE, ANGLE, MATIC, ETH and LINK.

dAMM Finance CEO Josh Baker told Decrypt at the time of its launch that the platform aims to have 200 tokens listed within its first year of operation, addressing the problem that the majority of on-chain institutional lending platforms only lend stablecoins. "We're lending tokens that not even Genesis Trading has ever lended, or Amber," Baker said. "I don't believe any of the institutional lenders are touching most of the tokens that we plan on lending."

"As an institutional lending platform, dAMM’s design represents a step forward for capital efficiency in crypto asset markets and positions the platform to grow into a core pillar of the DeFi ecosystem," said Mitchell Nicholson, VP Ecosystem at WOO Network, in a statement accompanying the news of the raise. Nicholson added that WOO Network is looking forward to strengthening its partnership with dAMM Finance by "exploring opportunities to onboard both as a borrower and lender."

Building institutional DeFi infrastructure

LedgerPrime CIO Shiliang Tang, whose firm participated in the raise, agreed. "dAMM is building crucial infrastructure for institutions to be able to source a wide variety of tokens that would otherwise be hard to borrow from the market."

The platform embraces a form of "hybrid centralized-decentralized" model in which dAMM only lends to market neutral market makers, with all addresses on the platform labeled and subject to know-your-customer (KYC) and know-your-business (KYB) checks. "You can see in every pool exactly who your borrowers are, who your counterparty is," said Baker.

The result is to ensure that lenders have insight into the strategies market makers are pursuing, and how much they're allowed to borrow, enabling them to properly judge risk levels for each borrower.

"We look forward to seeing DAMM build better mechanisms for verifying credit-worthiness of institutions and generating yield for otherwise idle assets," said LedgerPrime's Tang.

Speaking to Decrypt, Baker explained that future plans for dAMM Finance include advanced risk management tools. "What we're building right now for dAMM version two is, you can choose on a slider what percentage of your loans you want to go to under collateralized lending, over collateralized lending, protocol insurance, maybe even an options vault. So, basically complete control over your own risk management."

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