This brings the total funding to $6.9 million, empowering users around the world to earn real revenue, increase their wealth, and fight inflation with DeFi.
Affine Raises $5.1M in a Seed Round Led by Hack VC and Jump Crypto
Affine will become a trusted protocol for users to generate returns that are radically different from the opacity (and sometimes even cheating) seen in the last cycle from companies like FTX, BlockFi, 3AC and Celsius. A truly decentralized product will be the antidote to this final cycle woes and will build on the spirit of the original blockchain. It’s a decentralized, trustworthy system that helps reveal how things work and that everyone can benefit from.
Due to macroeconomic downturn, this crypto winter has led to increased scarcity of real yield in the space. Simply put, DeFi’s value, which was up 5-6% in money market instruments like AAVE and Compound, was exciting when US Treasuries fell by almost 0%. But now that the US Treasury has hit around 5%, the real DeFi yields are starting to dry up.
In this environment, the company had to challenge itself to explore new DeFi strategies such as providing structured liquidity into decentralized exchange that still delivers real returns. Affine has created several diversified baskets, that allow users to participate in this crypto-economy, powered by DeFi, earning yield that is beyond what they can earn in the traditional financial system in a more transparent way.
A New Way of DeFi Management
In today’s market, most DeFi investors know that there are fewer and fewer opportunities to generate returns in a sustainable manner. In particular, many opportunities offer small returns that are too low to justify the risk, or generate “returns” through the issuance of tokens of questionable value. One bright spot, providing liquidity to decentralized exchanges (DEXes), can actually be a productive place to earn, but only if managed well.
To do this, users contribute liquidity to the DEX, allowing other users to earn transaction fees when exchanging assets. However, while liquidity provision has generated over $1B in fees in Uniswap over the last year, studies have shown that over $100M+ was lost due to impermanent loss. This is the underlying challenge that makes providing liquidity to DEXs too risky for most companies.
Affine not only offers users a novel way to generate sustainable revenue by providing liquidity to DEXs, but also integrates diversification into the protocol. Affine “baskets” are combinations of one or more “strategies” that can range from simple token holdings (e.g. wETH holdings), lending on money market protocols such as Aave and Compound, to more complex and sophisticated strategies such as the aforementioned liquidity offerings.
In addition, a single basket can contain strategies from multiple chains. Instead of worrying about exchanging tokens for new chains and pointing them to new projects, Affine streamlines the work by allowing users to explore multiple strategies with just a few clicks. This also provides the added benefit of minimizing idiosyncratic risk from a single strategy. For instance, platform’s leading basket, USD earn, gives users exposure to blue-chip lending protocols like Compound and Aave in addition to higher-yielding — but higher volatility — DEX LPing strategies.
The Affine project is just getting started, but there is no doubt that the project and community will evolve over time. The platform is making it possible to earn yield, without the boundaries created by centralized opaque institutions. No doubt, we are entering the era where crypto assets can generate revenue through decentralized protocols.
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