Term Labs has raised $2.5 million in a seed round led by Electric Capital and featuring participation from Coinbase Ventures, Circle Ventures, Robot Ventures, MEXC Ventures, and with angel investment from DeFi founders from Aura, Balancer, Hashlow and Llama.
The funds will be used to develop Term Finance, a decentralised lending protocol for Ethereum that will utilise an auction model to support fixed-rate/fixed-term lending, a first for DeFi.
Term Labs is a blockchain R&D company founded by a team possessing vast experience in traditional finance, big tech, and decentralized finance. Its main objective is to develop blockchain-based fixed-rate lending solutions that are resilient, transparent, and scalable. In short, the protocol aims to provide institutional-scale, low-cost and crypto-native solutions for borrowers and lenders.
The market gap for centralised crypto lenders providing fixed-rate loans to institutions has grown since such entities mostly shut down, and existing DeFi protocols have not created scalable models to serve these users. Term Finance will bring transparent and scalable solutions to the market, said Dion Chu, CEO of Term Labs.
“This funding allows us to develop a decentralized solution for the crypto lending market that saw over $80 billion in originations a quarter at its peak,” states Dion Chu.
“Recent failures of centralized institutions in the crypto lending market highlights an urgent need for the market to move towards scalable on-chain solutions,” Dion added.
“We believe Term Labs has the potential to bring a much-needed solution to the market with its decentralized lending protocol,” states Ken Deeter, partner at Electric Capital. “Term’s unique auction model originates loans at scale without slippage, bid-offer spread or other hidden transaction costs seen in other variable and fixed rate lending protocols.”
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