A Chinese DeFi startup – dForce – has raised $1.5M led by Multicoin Capital.
0/ Today I’m excited to announce that @multicoincap led a $1.5M round in @dForcenet, the world’s first “Super-network” for open finance protocols. Coinvestors include our friends at CMB International (CMBI) and @huobicapital.https://t.co/obXTCYUxIp
— Mable Jiang (@Mable_Jiang) April 15, 2020
The strategic round also comes with participation from Huobi Capital and CMBI – a wholly-owned subsidiary of China Merchants Bank (the 5th largest bank in China).
According to Multicoin Capital Principal Mable Jiang, as reported by The Block, “dForce is building the first ‘super-network’ of DeFi protocols” looking to draw parallels to Chinese super applications like WeChat and Kakao. In short, the goal is the build an entire ecosystem of financial protocols, providing a full-stack solution for DeFi.
dForce, currently #7 on DeFi Pulse with $24.4M in value locked, supports two main DeFi protocols – a lending platform LendF.Me and fiat-collateralized stablecoin USDx.
According to March’s ecosystem report, LendF.Me’s cumulative supply has increased by 75.4% since February, reaching over $86.9M in total supply. In addition, cumulative borrows have increased by 108.4% to $25.8M.
Graph via dForce Ecoystem Update – March 2020
dForce’s native fiat-backed stablecoin, USDx, has also seen increasing growth in March, reaching 2,579 holders across 11,546 transfers and $4M in transaction volume in March, a 40% month-over-month increase since February.
With dForce’s growth in DeFi lending along with its vision of becoming a DeFi super-network in China, it’s no surprise the platform closed a round of funding by industry-leading investors.
However, there’s one thing to note about dForce. Earlier this year Compound accused dForce of stealing its copyrighted code. This is somewhat apparent when looking at the similarities between the Compound’s dashboard and Lendf.me’s dashboard. In response to the allegations, dForce has included Compound in its attribution and copyright section on its FAQ, stating“Lendf.me comprises of the following modules: Money Market Contract (based on Compound V1), Interest rate models, oracle, liquidator, liquidation monitor…etc”
According to The Block, Compound is still exploring legal actions against the Chinese DeFi platform.
Regardless, dForce is seeing an increasing amount of traction out of China as seen with their increases in deposits and borrowing volumes along with the fair growth in its native stablecoin USDx.
The Chinese super DeFi platform also features a native token, DF. The native token grants holders the right to govern its protocols including USDx’s selection of constituent stablecoins, lending protocol’s supported assets, interest rate models, transaction fees, and more.
However, the DF token is currently not listed on major tracking sites like CoinMarketCap or Messari so metrics surrounding the DeFi platform’s native token are largely unknown.
Key Takeaways
With the Chinese DeFi platform closing a round from industry-leading investors, we can expect the platform to continue to blitzscale into different DeFi verticals – including liquidity, lending, derivatives and other money protocols.
In the coming months, dForce users can expect the release of the USDx Savings Rate – a savings rate identical to the DSR for the platform’s native stablecoin, USDx. There will also be the launch of dTokens, a wrapped ERC20 token representing a pro-rata claim of a specific ERC-20 token plus interest accrued. In practice, dTokens are the equivalent of Compound’s cTokens.
It’s clear that dForce is drawing from the playbook of other successful money protocols with a specific target towards the Chinese market. With Multicoin, Huobi, and one of China’s largest banks backing the project, we’ll be keen to see how the DeFi platform fairs in its respective market.
One thing is for sure, there’s an increasing amount of competition for value between Ethereum’s money protocols and there seems to be little slowing down DeFi VCs despite the global pandemic.
To stay up to date with dForce, make sure to follow the official Twitter.
Analyst at Bankless – one of the leading resources for open finance. Lucas is an active contributor to the DeFi ecosystem with appearances in other notable DeFi outlets including The Defiant and Our Network. He has years of experience working with dozens blockchain and token startups where he focused on token economics, marketing, and growth.