After securing a $3.6 million seed funding round, decentralized finance (DeFi) platform Curvance has emerged from stealth mode.
Positioned as the “everything app” for decentralized finance, lending, and borrowing, Curvance seeks to solve the problem of fragmentation across different chains and protocols.
Curvance to resolve Defi fragmentation
The seed round, held on December 5, garnered support from more than 20 decentralized autonomous organizations (DAOs) and prominent developers.
Notable contributors from over 20 decentralized autonomous organizations and prominent developers. Among the backers were Offchain Labs, developer of Arbitrum, a cross-chain messaging platform Wormhole, and angel investors including Sandeep Nailwal, co-founder of Polygon.
Notable contributors from a variety of cryptocurrency projects participated in the fundraising, including Scroll, Mantle, Eigenlayer, GMX, Curve Finance, Convex Finance, Balancer, Aura Finance, and Pendle Finance, along with DAOs such as Frax Finance.
Described as a DeFi “everything app” for lending and borrowing, Curvance aims to solve the problem of fragmentation across chains and protocols.
Curvance, an app that currently supports Ethereum and layer 2s like Arbitrum, Optimism, Scroll, Base, and Polygon zkEVM, improves cross-chain capital efficiency by leveraging liquidity from decentralized exchanges like Curve, Balancer, Velodrome, GMX, and Pendle. Polygon co-founder Sandeep Nailwal highlighted Curvance’s potential to simplify participation in Polygon DeFi and potentially streamline the onboarding process.
Curvance also announced plans to use the acquisition proceeds to expand its business, conduct security audits, and recruit top talent in the DeFi market.
Co-founder Chris Carapol added: This funding round will allow Curvance to expand its value proposition of providing a more accessible money markets experience for both DeFi newcomers and experienced yield farmers and traders.
co-founder; Michael Butcher emphasized the strategic approach to fundraising, saying: When they set out to raise funding, they decided to talk to partners first instead of going to venture capital firms.
He also emphasized that this approach ensured that the investor group was truly invested in Curvance’s long-term success.
In the broader context of the omnichain money markets sector, Curvance faces competition from projects such as Radiant Capital. Built on LayerZero’s interoperability protocol, Radiant Capital now supports lending and borrowing across Ethereum, Arbitrum, and BNB chains, following a $10 million investment from Binance Labs last July.
However, both Curvance and Radiant Capital may face challenges if existing DeFi lending platforms such as Aave and Complex also enter the same niche.
Defi dynamics and regulatory issues
According to a recent report, the DeFi sector is currently valued at approximately $44.1 billion and is expected to grow at a compound annual growth rate (CAGR) of 46% from 2023 to 2030.
Notable trends in DeFi in 2023 include decentralized exchanges (DEXs), increasing integration between DeFi and traditional finance, the rise of governance tokens, and the traction gained by decentralized insurance.
The resurgence of yield farming has also served as a strategy to attract new users to DeFi, and demand for leverage remains an important source of high returns. However, the long-term stability of the sector depends on achieving regulatory clarity.
The U.S. Securities and Exchange Commission (SEC) has been actively monitoring the DeFi space, issuing statements addressing related risks, regulations, and opportunities. In response to the growth of DeFi platforms, the SEC proposed expanding the term exchange to encompass a broader range of trading activity in the United States.
Despite these regulatory plans, the cryptocurrency industry has been vocal about the SEC’s proposed regulations.
Some argue that these rules could violate developers’ First Amendment rights and perpetuate the SEC’s historical oversight problems in adapting to this innovative sector.
The SEC has a variety of tools, from rulemaking authority to enforcement actions, to ensure fair market conduct and provide a level playing field for all investors.