Crypto venture capital firm Polychain Capital and fund manager Three Arrows Capital have backed liquidity protocol KeeperDAO in a seed funding round announced Friday.
- Polychain and Three Arrows were KeeperDAO's only investors in the round that raised a “seven-figure sum,” KeeperDAO founding member Tiantian Kullander told CoinDesk.
- KeeperDAO is a decentralized finance (DeFi) protocol that lets participants in communal liquidity pools (known as keepers) participate in strategies involving margin trading and lending.
- Keeper pools are able to combine their capital into Ethereum’s smart contracts and profit as a group from on-chain arbitrage and liquidation opportunities.
- Three Arrows Capital CEO Su Zhu said KeeperDAO would help to keep liquidations on Ethereum “efficient” while making sure participants “earn their keep.”
- Going forward, KeeperDAO plans to issue its own governance token as a tool for balancing incentives between keepers and liquidity providers.
- Thanks to the project, DeFi protocols based on on margin and borrowing would be able to “lower collateralization levels over time,” according to Sherwin Dowlat, investments at Polychain.
- Three Arrows recently participated in a $3 million investment in Aave the firm behind the third-largest lending platform in DeFi.