Company’s technology bridges decentralized finance and traditional finance to make investments accessible and cost-effective
DEFYCA, a Luxembourg-based digital securities platform has completed a seed funding round of $1.3 million USD led by QBN Capital and Blizzard Fund. The company makes private credit investment more accessible and more cost-effective.
DEFYCA has developed a blockchain protocol that enables digital and crypto investors to invest in traditional debt securities and loan portfolios via tokenized assets. By bridging DeFi (Decentralized Finance) and TradFi (Traditional Finance), DEFYCA is solving problems from two worlds.
The DeFi market is commonly known for its volatility, and there are only a limited number of ways to invest stablecoins in the short-term, while retaining a stable secured yield. In the TradFi credit market, continuous trading is non-existent. This is a direct result of its lengthy, complex, and manual processes.
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DEFYCA is resolving these traditional market gaps. On the DEFYCA protocol, tokenized assets are issued, securitized, and structured into liquid pools, which can be traded instantly and with no friction. Price discovery, liability matching, settlement, and payment flows are executed automatically through smart contracts. The result is a significant reduction in both investment costs and time for the issuer. It also offers investors the opportunity to earn tangible secured returns on stablecoins.
DEFYCA’s proprietary protocol has been specifically designed to remove counter-party risk in trades. It includes an independent risk oracle for continuous risk monitoring, instant Delivery versus Payment (DvP) settlement, specially secured MPC custodial wallets, an established crypto custodian, and treasury accounts provided directly at Circle, the stablecoin issuer. In total, enables all participants to invest and trade tangible fixed income on the blockchain while significantly reducing their exposure or risk.
“Our goal is to provide access for investors to invest frictionlessly in the private credit markets, whilst providing debt funds with a fully-digital end-to-end infrastructure built on blockchain technology,” said Pat Hourigan, Co-founder of DEFYCA. “The DEFYCA protocol is built using existing, proven, resilient, scalable, high-performance infrastructure, connected with digital and crypto financial markets.”
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“Inclusion of real-world capital markets represents one of the biggest opportunities for decentralized finance and the ecosystem’s ability to expand its risk management capabilities and diversify on-chain collateral. DEFYCA is well-positioned to accelerate the pace of these assets coming onto Avalanche,” said Lydia Chiu, Investor at Blizzard Fund and VP of Business Development at Ava Labs.
The seed funding will be used to launch the protocol and take the product to market, taking advantage of the growing interest in digital securities and decentralized finance from the traditional finance industry. DEFYCA will launch its mainnet in Q1 2023.
“The promise of DEFYCA is to create a new phase in the evolution and democratization of the private credit markets,” said Alex Garmash, Co-founder of DEFYCA. “Our protocol will prove that Web3 can open an accessible and frictionless trading venue, where all investors can trade, and funds can raise capital using innovative tokenized securities.”
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