Alkemi Offers DeFi Interest App With a Liquidity Pool of $16 Million USD


Alkemi, a new kind of decentralized finance (DeFi) company, has a new plan. The company wants to offer people more liquidity by offering them interest on their tokens. The company, which is a part of the TechStars Blockchain Accelerator, unveiled the new liquidity pool of $16 million USD today.

The CEO of Alkemi, Ryan Breen, affirmed that the company is creating a liquidity system that will be accessible for exchanges and service providers. He received investment from Joseph Weinberg (chairman of Shyft), Alex Friedberg (BXB Capital) and others in order to create it.

According to Weinberg, the idea was to “solve inter-settlement lag” in which you can have reductions in fee rates across space over time since you will have way more liquidity this way and the execution of the trades will also be faster.

With the use of the Alkemi protocol, users will be able to connect their own wallet to smart contracts using the official app and then move it like a savings account. The exchanges will be able to use the funds of the clients then and the clients will determine a lockup timeframe. The members of the company explained that it is not a loan, however, and that the user will retain its private keys.

Initially, the service will start with Ethereum, but more tokens are expected in time. The first audits will be made by other companies in 2020, in order to prove that the company is safe, and BTC and XRP were already promised as tokens which will be usable in the future.

The company is clearly inspired by other decentralized financial projects. Some of the most popular ones at the moment are Dharma, UniSwap, and MakerDAO (associated with DAI, a stablecoin).

According to Breen, it is still hard to find enough liquidity in crypto markets. He affirmed that decentralization is, by design, something that divides people and separates their concentrations of wealth. Unfortunately, in order to have liquidity, you need to concentrate the wealth in a platform and this is the main goal of the company in order to solve the liquidity paradox of the industry.

He also affirmed that he believes that the companies should be working together instead of against each other because the liquidity space will be a win for all.

Creating A Liquidity Pool Together

In order to create its liquidity pool and see it becoming successful, the members of the company know that they will need help. They will simply not be able to do it alone, they know, as exchanges and other important actors need to be onboard if they want to achieve some decent level of success.

Alkemi, they affirm, is betting on providing liquidity pools that will help exchanges and funds. The money will be then divided into three different pars. One of them will be the interest for the people who saved the money, Alkemi will get a third of it and the institutional partners will get their third.

Frank Schuil, the CEO of Safello, a Swedish exchange, affirmed that the main liquidity problems arise when demand goes up too quickly. This makes liquidity dry up and even established companies often have many problems at times like this.

Safello might not be a partner yet, but this is what Weinberg was talking about. If these companies unite, they will be able to re-balance their books instead of competing and this can get them some important benefits.

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