Lending project B.Protocol, which builds tools to “democratize” DeFi liquidations, raised $2.2 million.
B.Protocol is one of the many money legos propping up the patchwork landscape of decentralized finance. Catering specifically to lenders in need of liquidating sour loans, it had roughly $87 million in total value locked as of press time, according to data website DeFi Llama.
Early-stage crypto fund 1kx led B.Protocol’s seed round; it is slated to ultimately receive 500,000 BPRO tokens. Other notable backers include Spartan Group and Robert Leshner’s Robot Ventures, with Dovey Wan’s Primitive Ventures chipping in a smaller sum.
They will receive their tokens over a four-year linear vesting period, according to Eitan Katchka, B.Protocol’s ecosystem development chief. That time frame is rather long but not unheard of in crypto investing, a handful of VCs told CoinDesk.
Building the preeminent liquidity backstop for decentralized finance (DeFi) lenders won’t happen overnight, B.Protocol’s Israel-based founders noted. Solving what Katchka described as a lingering pain-point in the crypto capital markets may still be worth it.
DeFi loans aren’t always fully collateralized, Katchka said. This can become a problem when crypto bets go south and liquidations needs to occur. That’s where B.Protocol’s pool of user-pitched “backstop liquidity” steps in.
“The backstoppers – the users who provide liquidity to the backstop – actually can earn some profits from liquidation, something which till now you had to be highly technical” to achieve, he said.
B.Protocol services decentralized borrowing protocol Liquity and Hundred Finance. It’s working on an integration with MakerDAO and Fuse, Katchka said.
UPDATE (Dec. 22, 21:57 UTC): Adds information on seed round participants.