Venture Capital Giant Injects Millions into Ethereum DeFi Startup: Good for ETH

Over the past few months, Ethereum, the second-largest cryptocurrency and blockchain by market capitalization, has been seeing a Cambrian explosion in its decentralized finance (DeFi) sector. This hasn’t gone unnoticed.

Case in point, a leading venture capital giant in Silicon Valley has backed DeFi application Compound, long one of the most popular Ethereum-based protocols in the digital asset ecosystem.

Legendary VC Firm Backs Ethereum Startup

On Thursday, Fortune revealed that Compound — a decentralized platform that allows users to lend out and borrow Ethereum-based assets like ETH itself, USD Coin, Basic Attention Token, and 0x — has secured a $25 million worth of investments from Andreessen Horowitz’s a16z (round leader), Paradigm, Bain Capital Ventures and Polychain Capital.

Compound CEO Robert Leshner explained that his company’s goals will be to be integrated “with crypto exchanges, custodians, and wallets by the end of 2020, Leshner says. This means ordinary consumers could soon be able to use a service like Coinbase or Kraken to lend out their cryptocurrency.”

A16Z Going Big on DeFi

It seems that a16z is going big on decentralized finance, boding well for Ethereum’s future prospects.

Last September, the crypto fund of the venture capital behemoth made a $15 million U.S. dollar investment into the MakerDAO blockchain project. This substantial investment sees a16z crypto picking up 6% of the total MKR token supply for the aforementioned investment.

For those who are unaware, Maker, a relatively new, yet well-established project, offers the first fully-fledged decentralized stablecoin, named DAI, which is backed by a system that has the first “formally verified smart contracts on Ethereum (or any blockchain, for that matter).” Katie Haun, a General Partner and co-founder at a16z crypto, explained the investment:

As a first mover and innovator in stablecoins, MakerDAO represents a very compelling…

Source Link