London-based fintech startup Geode Finance raises $3M in Seed funding to provide DAOs with white label Liquid staking solution
The exponential growth of decentralized finance (DeFi) has led to increased demand for liquid staking as billions in liquidity flow to projects into the DeFi space. Investors and users alike love liquid staking because of the potential to generate passive income without having to lock their liquidity into a vanilla staking solution.
For the uninitiated, liquid staking protocols enable users to acquire liquidity on staked assets and use staked assets as collateral in (decentralized) financial applications through tokenization. One of the leading startups in this space is Geode Finance, a London-based DeFi startup creating the multichain liquid staking universe where different PoS chains are Galaxies and DAOs are Planets to be explored.
Geode allows any DAO to have its own liquid staking solution with its white label product, thereby decentralizing the process while also improving network security.
Today, Geode announced it has raised $3M in a seed funding round led by Multicoin Capital, with participation from other market makers and ecosystem partner GSR, blockchain investment fund C² Ventures, yield optimization protocol Yield Yak, and blockchain infrastructure provider Eden Network.
With this funding, Geode Finance aims to revolutionize staking by providing DAOs with a customizable and easy to deploy liquid staking solution. Geode will also comprehensively support DAOs and protocols that integrate with Geode to launch their own liquid staking product and associated yield-bearing token.
Co-founded by Simon Furlong, Geode Finance is a provider of white-label liquid staking solutions, tailor-made for DAOs. With Geode’s customizable liquid staking products, DAOs and their members are empowered with vastly improved yields, new revenue generation opportunities, and capital efficiency across the DeFi landscape on Proof-of-Stake blockchains.
Geode will initially deploy on Avalanche Network, before expanding to Ethereum 2.0 and other popular proof-of-stake (PoS) blockchains to facilitate the growth of the multichain economy.
“Geode is building trustless white-label staking pools and derivatives products that provide granular control over delegation mechanics within proof-of-stake networks. The prospect of fully sovereign staking solutions is massively appealing for DAO treasuries, institutional capital allocators, and individual actors that lie across the risk spectrum,” said Shayon Sengupta, Investment Associate, Multicoin Capital.
With this strategic investment from Multicoin Capital and supporting investors, Geode Finance aims to revolutionize staking by providing DAOs with a customizable and easy to deploy liquid staking solution. Geode will also comprehensively support DAOs and protocols that integrate with Geode to launch their own liquid staking product and associated yield-bearing token.
DAOs are currently limited in their ability to diversify and earn a yield on their treasuries – which are worth over $10B in aggregate – or to offer their participating members meaningful reward incentives. Most do not end up leveraging the full potential of PoS networks, where everyone has the ability to get rewarded for their participation. The current options for DAOs include centralized solutions with non-negligible third-party risks and high management fees, or spending valuable time and developer resources to create their own staking solution.
“In a proof-of-stake world, why shouldn’t all base assets generate yield? This is what has been driving our team to create streamlined solutions for everyone to take full advantage of yield generating possibilities. By providing our white label staking solution to DAOs without fees we instantly become a very compelling proposition, allowing any DAO to benefit by improving DAO economies and product offerings at large,” said Simon Furlong, Co-Founder and COO of Geode Finance.
“We’re thrilled to be seed investors in Geode Finance. This partnership is a perfect fit for Yield Yak given we’re extremely excited about the potential of liquid staking and unlocking new yield potential for regular DeFi users. With a secure and user-friendly solution, we believe Geode’s novel liquid staking protocol will be a significant contributor to the future Web3 Ecosystems,” said Dylan Coady, Head of Communications at Yield Yak.
Only about 65% of all AVAX in circulation is staked to validate the network, which means that approximately $6.5B worth of AVAX tokens is sitting idle in DAO treasuries and elsewhere, not earning any yield. At a conservative staking reward rate of 7%, this $6.5B worth of idle AVAX could be generating nearly $450M worth of AVAX rewards annually. Additionally, of the ~55% of AVAX supply that is currently staked, the majority is staked directly to validator nodes which provide only a single layer of returns via staking rewards.
Geode addresses this gap in DAO infrastructure and tooling by offering a liquid staking solution that aligns with the values of decentralization and DeFi composability while striving to provide the highest possible yields on Avalanche Network. This feat is accomplished in part through a strategic partnership with Eden Network. Eden runs its own validators to support Geode’s operations while stacking multiple layers of yield through validation, subnet validation, and additional yield-boosting strategies, thereby increasing the amount of yield passed on to DAOs and their users that integrate this innovative solution.
Despite the growing popularity of centralized B2C liquid staking solutions, there are few – if any – B2B2C liquid staking products tailor-made for DAOs. By combining several layers of staking and validator rewards, with a high degree of customizability and security, Geode Finance provides the ultimate infrastructure solution to support the growth of the multichain DAO economy. Importantly, Geode offers its services to DAOs at no cost.