Element Finance has raised a $32 million Series A round at a $320 million valuation. The company has been building a new DeFi (decentralized finance) protocol on top of the Ethereum blockchain. It lets you earn predictable returns on investments thanks to fixed rates over a predetermined period of time.
Polychain Capital is leading today’s funding round. Other new investors include Republic, Advanced Blockchain, P2P Validator, Rarestone, Ethereal Ventures and their limited partners. Some of the company’s existing investors are investing once again, such as Andreessen Horowitz, Placeholder, A_Capital0 and Scalar Capital. Finally, there’s a long list of DeFi builders who participated in the round.
Element Finance is still relatively new, as the company launched its protocol on the Ethereum mainnet on June 30. But it has been quite successful already as there are currently the equivalent of $180 million in total value-locked.
Users can currently participate in 10 fixed-rate pools. They can contribute with stablecoins, such as DAI or USDC, with popular (wrapped) cryptocurrencies, such as wBTC, or with sophisticated derivative assets, such as steCRV — steCRV is a token that represents a stake in the Curve ETH/stETH liquidity pool.
While this is already a cool product for individual investors, Element Finance also wants to convince fund managers to invest in an Element pool. The company has launched a treasury management initiative to convince other DeFi protocol makers, funds and institutions that they should allocate a portion of their capital to Element Finance.
In order to guarantee fixed rates, some users can opt for higher returns. They contribute to liquidity pools with variable interests. But in that case you can’t predict your returns at the end of the year.
So far, 9,000 users have tried Element Finance. The company plans to introduce a governance system with different voting vaults and different incentives. With today’s funding round, Element Finance will hire more people across all areas.