Veteran cryptocurrency investor Polychain Capital has joined a funding round in DFX Finance, a new decentralized finance exchange protocol optimized for non-U.S. dollar stablecoins.
DFX raised more than $5 million in seed funding from Polychain and True Ventures to create a new blockchain-powered market for stablecoins and open up DeFi applications to a global audience. Announcing the news Wednesday, DFX said that other investors included industry players like Hex Capital, CMS Holdings, Castle Island Ventures and DeFi Alliance.
DFX is currently being developed by contributors from major crypto projects and firms like the Ethereum Foundation and ConsenSys. The platform is looking to provide a solution for DeFi users residing outside of the United States who often have to take on U.S. dollar risk when depositing, collateralizing and pooling liquidity.
As such, DFX will debut liquidity mining, launching with three foreign stablecoins, including the Canadian dollar-pegged CADC, euro-based EURS, and the Singapore dollar-pegged XSGD. As the platform grows, DFX will add more stablecoins and plans to allow DFX tokenholders to vote for new coins they'd like to add to the platform.
In order to enable liquidity mining, DFX is using major U.S. dollar-pegged stablecoin USD Coin (USDC). “We leverage USDC in the heart of DFX as all of our non-USD stablecoins are paired with USDC,” core DFX contributor Kevin Zhang told Cointelegraph.
Niraj Pant, partner at Polychain Capital, believes that DFX has solid potential to become a major player in DeFi industry:
“By bringing FX into the DeFi space, we believe DFX will enable dozens of novel applications. Ultimately, we believe DFX is well positioned to become a core piece of DeFi infrastructure.”
Amid the DeFi industry steadily gaining momentum, Polychain Capital has been actively investing in various DeFi projects. Earlier in February, the company participated in a $1 million funding round for Manta Network to help the startup build a fully private decentralized exchange on Polkadot.