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The service wants to create a liquid money market for cryptocurrencies
Announced today, Compound, the company creating an "overnight" market for short-term lending, has announced a successful seed funding round of $8.2 million.
The funding round was led by Andreessen Horowitz, crypto hedge fund Polychain Capital, and Bain Capital Ventures. In total there were eight investors, including Transmedia Capital, Compound Ventures, and Abstract Ventures. Coinbase Ventures, the crypto exchange's new fund also participated in the round. This is one of Coinbase's first investments, alongside 8 other rapid-fire investments over the past two months.
Funding will be used to expand on the San Francisco-based seven person team. Money will also go to expanding the platform and building a great network of partners.
The service acts as a market for borrowers and lenders, giving people the ability to gain interest on their cryptocurrencies. Currently, much of the supply of all cryptocurrencies sit stagnant in wallets, value only changing with the ebb-and-flow of the market values.
As TechCrunch sums it up,
"It’s an “overnight” market that permits super-short-term lending. While it’s not a bank, it is centralized, so you loan to and borrow from it directly instead of through peers, alleviating you from negotiation. If you loan, you can earn interest. If you borrow, you have to put up 100 percent of the value of your borrow in an asset Compound supports."
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