Lending project B.Protocol, which builds tools to “democratize” DeFi liquidations, raised $2.2 million.
B.Protocol is one of the many money legos propping up the patchwork landscape of decentralized finance. Catering specifically to lenders in need of liquidating sour loans, it had roughly $87 million in total value locked as of press time, according to data website DeFi Llama.
Early-stage crypto fund 1kx led B.Protocol’s seed round; it is slated to ultimately receive 500,000 BPRO tokens. Other notable backers include Spartan Group and Robert Leshner’s Robot Ventures, with Dovey Wan’s Primitive Ventures chipping in a smaller sum.
They will receive their tokens over a four-year linear vesting period, according to Eitan Katchka, B.Protocol’s ecosystem development chief. That time frame is rather long but not unheard of in crypto investing, a handful of VCs told CoinDesk.
Building the preeminent liquidity backstop for decentralized finance (DeFi) lenders won’t happen overnight, B.Protocol’s Israel-based founders noted. Solving what Katchka described as a lingering pain-point in the crypto capital markets may still be worth it.
DeFi loans aren’t always fully collateralized, Katchka said. This can become a problem when crypto bets go south and liquidations needs to occur. That’s where B.Protocol’s pool of user-pitched “backstop liquidity” steps in.
“The backstoppers – the users who provide liquidity to the backstop – actually can earn some profits from liquidation, something which till now you had to be highly technical” to achieve, he said.
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B.Protocol services decentralized borrowing protocol Liquity and Hundred Finance. It’s working on an integration with MakerDAO and Fuse, Katchka said.
UPDATE (Dec. 22, 21:57 UTC): Adds information on seed round participants.