Lending Startup Parallel Finance Raises $2M to Bring More DeFi to Polkadot, Kusama

Pantera and Polychain are backing the project.

Jun 14, 2021 at 3:31 p.m. UTC
Updated Sep 14, 2021 at 1:10 p.m. UTC

Parallel Finance has raised $2 million to make decentralized finance (DeFi) a bigger part of the Polkadot ecosystem.

“One of the biggest problems we are trying to solve is the lack of lending protocols in the Polkadot/Kusama ecosystem,” Parallel Finance founder Yubo Ruan told CoinDesk in an interview. “We’ve seen a significant demand for DOT/KSM holders to borrow and lend their tokens.”

Announced Monday, Ruan’s project has won the backing of Pantera Capital, Polychain Capital, Lightspeed Venture Partners, Breyer Capital, 8 Decimal Capital and Hypersphere Ventures. 

The funding comes as action on Polkadot ramps up in anticipation of the interoperability network’s “parachain” auctions. Auctions for slots on Polkadot’s experimental “canary network,” Kusama, begin this week.

Parallel Finance will run on both Polkadot and Kusama, offering DOT and KSM holders compound staking and zero-collateral, fixed-rate loans for parachain auctions in addition to interest rate swaps and a decentralized credit rating system.

DOT and KSM holders are currently challenged by the competition between lending and staking, Ruan said. If the lending rate is higher than the staking rate, holders have to unstake their tokens to earn yield, hurting network security. If the lending rate is lower than the staking rate, holders will prefer to stake DOT as the higher-yield option.

Ruan said Parallel solves this problem by using a lending protocol that allows holders to borrow cash on top of their staking derivatives. Using Parallel, users can earn "parallel interest" without sacrificing Polkadot’s network security, he added.

Ruan is supported by a team of developers and a technical adviser from Stanford University.

The Festival for the Decentralized World
Thursday - Sunday, June 9-12, 2022
Austin, Texas
Save a Seat Now

DISCLOSURE

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Trending

1
CoinDesk - Unknown
Amid Market Downturn, ‘Goblintown’ NFTs Have Their Moment

The goblin-themed PFP collection did over $7 million in sales volume this weekend, fueled by rumors a larger team could be behind the scenes.

The goblin-themed PFP collection did over $7 million in sales volume this weekend, fueled by rumors a larger team could be behind the scenes.

CoinDesk - Unknown
2
CoinDesk - Unknown
Crypto Funds Shrink to Lowest Since 2021 Summer Bear Market

Investors pulled out some $143 million from digital asset funds as confidence in crypto is flailing.

Investors pulled out some $143 million from digital asset funds as confidence in crypto is flailing.

CoinDesk - Unknown
3
CoinDesk - Unknown
How the Metaverse Could Be a Game-Changer for NFT Gaming

Rather than letting players port weapons or powers between games, non-fungible tokens will more likely serve as building blocks for new games and virtual worlds. This piece is part of CoinDesk's Metaverse Week.

Rather than letting players port weapons or powers between games, non-fungible tokens will more likely serve as building blocks for new games and virtual worlds. This piece is part of CoinDesk's Metaverse Week.

CoinDesk - Unknown
4
CoinDesk - Unknown
Arthur Hayes, ex CEO de BitMEX, es sentenciado a 2 años de libertad condicional

Hayes se declaró culpable de un cargo de violación de la Ley de Secreto Bancario (BSA) en febrero y enfrentó una sentencia de hasta 12 meses de prisión.

Hayes se declaró culpable de un cargo de violación de la Ley de Secreto Bancario (BSA) en febrero y enfrentó una sentencia de hasta 12 meses de prisión.

CoinDesk - Unknown