Crypto tech startup izumi Finance raises $3.5M in Series A funding led by DeFi and crypto investors
Investments in the crypto space are at record levels. As mainstream adoption of cryptocurrencies grows, investors are pouring billions of dollars into decentralized finance (DeFi) and NFT startups.
With millions of people now investing in cryptocurrencies, one of the hottest trends in DeFi world is yield farming (also called liquidity mining), a process that allows cryptocurrency holders to earn rewards on their holdings. However, liquidity mining can become a complicated process and setting up liquidity on a DeFi exchange like Uniswap is not easy.
Enter izumi Finance, a protocol that provides liquidity as a service on Uniswap V3. izumi Finance solves a pain point in Uniswap V3 as well as its concentrated liquidity pools. izumi provides programmable liquidity mining on Uniswap V3. At the same time, it further innovates the liquidity mining initiatives over the traditional Uniswap V2-style pools.
To further grow its platform, izumi announced today it has closed $3.5 million in Series A funding to facilitate its native token (iZi) launch, which will happen on December 20 and will be immediately followed by the launch of the izumi “LiquidBox” platform on December 21.
The announcement also follows a $2.1M funding the company raised back in November. To date, izumi has raised a total of $5.6 million. Backers for this round include Mirana Ventures, IOSG, Cadenza, FENBUSHI, EVG, Hashkey, GSR, CyberX, Bixin, Kronos Research, Dorahacks, Gate Labs, MEXC, and individual investors from Nansen, Perp, Chainlink, and Babel.
Similar to bank loans, with yield farming, a crypto investor deposits units of a cryptocurrency into a lending protocol to earn interest from trading fees. Users are later rewarded with additional yields from the protocol’s governance token. Yield farming or liquidity mining works with a liquidity provider and a liquidity pool (a smart contract filled with cash).
However, unlike other platforms, izumi lets users earn more with concentrated liquidity. For example, users can earn more than 300% with their Uniswap V3 LP tokens staked on its platforms, izumi said on its website.
Now, izumi is building a fresh and innovative tool that is highly needed in the DeFi ecosystem, especially after Uniswap has released its V3. Thanks to the innovative concentrated liquidity model in Uniswap V3, liquidity providers have been able to bond their assets to one or more tight price ranges, a feature that should help them by capturing much more transaction fees for the same investment.
Unfortunately, some studies have revealed that investors actually end up losing capital due to increased impermanent loss. Defining tight price ranges means being left exposed 100% to the asset losing in value should the price break out of the range.
izumi’s innovative liquidity mining tool “LiquidBox” solves a number of issues in both Uniswap V3 mining and the classic Uniswap V2 design, allowing investors to increase their earnings and for projects to more efficiently attract liquidity with token rewards.
This is made possible by LiquidBox’s design of allocating reward tokens according to specific rules to achieve the best outcome for the projects. For example, one model involves only providing buy side liquidity to Uniswap V3 and using the other portion of a portfolio to farm rewards directly. This ensures the user only suffers some downside impermanent loss but nothing on the upside. izumi also features innovative models like providing liquidity only to specified ranges, solving the “Pool2 dilemma” of excessive dilution.
izumi’s customizable models create a win-win situation both for users, who are going to earn by staking their tokens on izumi, and for the projects, who will be able to take advantage of larger and cheaper liquidity pools.
“izumi is building another missing lego in the DeFi puzzle by helping projects achieve target liquidity distribution, including enhanced concentrated liquidity, with a suite of tools. We are very glad to be working with them on this ambitious and critical task!” – said Xinshu Dong, co-founder of IOSG.
“izumi’s vision is clear and meaningful: to help projects attract on-chain trading liquidity in an efficient and continuous way,” added Jimmy Yin, co-founder of izumi Finance. “LiquidBox of izumi will be our first step, and a multi-chain liquidity solution is on the way. We sincerely welcome every project to izumi to come to us for better and cheaper liquidity.”
Founded by Xinshu Dong, izumi Finance is the platform providing programmable liquidity as a service on Uniswap V3 multi-chains. It proposes LiquidBox liquidity mining platform to provide Uniswap V3 LP token staking rewards non-homogeneously in different price ranges, which could improve the efficiency of incentive distribution for reward providers and enhance the earnings of liquidity providers in Uniswap V3. In addition, izumi will extend liquidity service to multi-chains with built-in DEX and bridge in the future.