- Summary:
- Alkimiya is tackling the liquidity flow challenges in the DeFi sector and also provide better risk management.
Alkimiya has received $7.2 million in investment to develop their DeFi-centric protocol. Digital asset industry giants like Circle Ventures, Coinbase Ventures, and Dragonfly Capital Partners contributed to the investment round led by Castle Island Ventures and 1kx.
The money will mostly be used to recruit additional staff as the company prepares to release a comprehensive product suite in the first quarter of this year. This will include a Vault product and ETH staking contracts on the Ethereum mainnet. Additionally, the protocol’s growth and partnerships with important stakeholders will benefit from this strategic fundraising round.
Alkimiya’s different approach to DeFi
Depositors on the Alkimiya platform can get a cut of the earnings earned by block space producers through mining and staking. In Q2 2022, the protocol was released as a public beta on the Layer 1 blockchain Avalanche in order to conduct on-chain testing and fix any issues that may have arisen. Its current goal is to have a complete rollout on the Ethereum mainnet by the end of Q1 of 2023.
At the moment, most DeFi returns are dependent on the liquidity of volatile crypto coins. However, Alkimiya allows blockchain producers to lock in an upfront fixed rate of return for their future production, promising returns directly related to blockspace productivity.
This method was developed to mitigate the effects of erratic cash flow, which are worsened in low-liquidity DeFi environments. The protocol’s goal is to satisfy the hedging requirements of block producers and make up for the lack of support from natural cash flow. They may mitigate risk with this hedging option, while DeFi users will benefit from more access to the value created by the blockchain’s creators. With this additional infusion of capital, the protocol will be in a stronger position to attract miners and stakers who are looking to protect their earnings.