Teller Secures a Strategic Funding Round from Major Partners to Decentralize Unsecured Lending
Teller Today & Tomorrow
With the successful launch of V1 in Q4 of 2021 and the upcoming launch of V2, there’s been no shortage of developments and activity at Teller. Keeping that pace, Teller is pleased to celebrate another big milestone for the organization and DeFi alike.
Teller has recently secured strategic funding led by Blockchain Capital, Franklin Templeton, Toyota Ventures, Bessemer Venture Partners, Upstart Network, Signum Capital, United Overseas Bank, in addition to alumni from PayPal, Fundera, and Bison Trails.
The support provided by these partners enables Teller to further pioneer DeFi’s journey into unsecured lending.
“Teller is paving the way for a traditional financial primitive to enter the DeFi space: data-driven, unsecured lending and borrowing. The ability to append data to a loan request will transform how we interact with DeFi and unlock lending opportunities only currently available in traditional financial markets,” said Ryan Berkun, Teller’s Founder and CEO.
When user permitted data is appended to a loan request, consumers can unbiasedly be assessed for credit and barriers to entry begin to dissolve.
Lending in DeFi Now
DeFi protocols today account for $200B+ in total value locked (TVL), primarily from overcollateralized lending and trading applications. The undercollateralized market is emerging as the next sector of DeFi, with projects such as TrueFi ($900M+ TVL) and Maple Finance ($500M+ TVL) leading the way for undercollateralized business lending.
“Unsecured lending is a thorny problem in the pseudonymous on-chain world and one of the largest opportunities for DeFi,” said Bart Stephens, Co-Founder and Managing Partner of Blockchain Capital. “The Teller Protocol enables traditional and crypto native lenders to use the best credit scoring techniques possible while preserving privacy and tapping into decentralized liquidity pools.”
Evolving Market Participation
Financial institutions are opening up to the opportunities and novel business models that DeFi proposes. As we saw in 2021, major brands have entered the web3 ecosystem. We’ll see a similar pattern in DeFi in the upcoming year. Teller is in a position to power these mainstream players with a lending software that operates akin to their native system today.
Institutional lenders will be able to create their own data-driven criteria for committing assets, based on rules and filtered by asset request information. Lending can be automated by individuals, companies, protocols, DAOs, and other asset suppliers. This new branch of DeFi native lending software will broaden the reach of part participation in global capital markets.
Breaking Down the Protocol
The Teller protocol functions similarly to a limit order book, where buy and sell orders for loans are available to be executed at pre-specified parameters. Data used for CRA (credit risk analysis) is bridged from off-chain to on-chain for use with loan requests via bids and asks. Once there is a matching bid or ask between a borrower and a lender, the two parties will transact directly, based on the data that is provided or required. Borrowers requesting assets propose a loan request, and lenders supplying assets commit them to a loan request they select.
The terms of the loan are signed by the borrower and lender, and the loan is submitted by the filler on-chain through an atomic match. Funds are then dispersed to the wallet requested by the user. The status of the loan is tracked by the protocol and is either active, late, default, or closed.
A loan origination fee, to be determined by the governance contracts, is charged by the protocol and is automatically accrued to the DAO treasury.
Lenders also have the ability to pre-commit capital for an asset loan request that matches particular criteria. For instance, lenders can pre-commit assets to any user who meets, or is above, a certain benchmark.
Adding a new development, the protocol now allows asset loan requests to append any amount or type of data, as provided by and shared by the borrower at the sole discretion and control of the borrower. This data can include details on a borrower’s financial standing, social status, or identity. The protocol is data agnostic and does not form an opinion of the user.
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For more information, please visit: https://teller.finance
