Unbound Finance has raised $5.8 million from Pantera Capital, Arrington XRP Capital and others to build out the Unbound Dollar (UND), what it says is a novel stablecoin that can live on various blockchains.
UND is derived from liquidity pool tokens (LPTs), which investors receive in exchange for providing liquidity on automated market makers (AMMs) like Uniswap and PancakeSwap. The token can then be used by liquidity providers to take out loans in fiat currency, or just as a tokenized receipt of their investment into the pool.
“The liquidation-free collateralization platform allows users to borrow interest-free loans against liquidity pool tokens as collateral,” Unbound said in a press statement, making the project somewhat akin to MakerDAO’s DAI stablecoin.
Unbound’s funding round is the latest in a series of investments in decentralized finance (DeFi) projects as the sector booms near $100 billion in locked value. Investments in DeFi don’t seem to be slowing despite the recent downturn in the crypto markets.
Unbound’s protocol went live in December and launched its final testnet in April. It is one of the first projects to integrate with the newest version of Uniswap. According to CEO Tarun Jaswani, the funding will allow Unbound to further develop its tech, provide more liquidity and hire additional employees. Unbound also plans to pursue the development of aggregation contracts for Uniswap version 3.
Franklin Bi, Pantera Capital’s director of portfolio development, said his fund is particularly interested in Unbound’s development of LPTs.
“We believe LP tokens are just the tip of the iceberg when it comes to making assets more useful ‘on DeFi’ than ‘off DeFi’ and empowering DeFi users to do even more with their assets,” Bi wrote in an email to CoinDesk.
Unbound’s protocol and native stablecoin are already integrated with 12 AMM platforms, Jaswani said.