UNION Raises $3.9M to Build Open Financial Technology Stack & Risk Management Platform
We’re thrilled to announce the closing of a $3.9 million funding round from Alameda Research, Bering Waters Ventures, Spark Digital Capital, AAM, Solidity Ventures, 3 Commas, Cluster Capital, Rarestone Capital, Alpha Chain, Black Edge Capital and more. The funding round will help bootstrap the UNION risk management and asset protection platform on Ethereum, rolling out in the coming months.
“One of our goals is to create protection products and an ecosystem that let people participating in DeFi sleep well at night,” said Michael Beck, project lead for UNION. “We’re amazed at the incredible support our project has received and we’re excited about the future and our role in strengthening the DeFi marketplace.”
- As more capital flows into the DeFi market, the demand for advanced risk management and asset protection products will continue to surge. Over $12 billion of capital is currently locked in DeFi, but many of the complex derivatives and insurance infrastructure necessary to support the expansion of capital in the sector is either missing or in its infancy.
Recently, fixed-rate lending products, structured risk instruments, price risk derivatives hedging, and protocol-specific insurance mutuals have emerged as the first wave of innovation in advanced risk management in the DeFi ecosystem. However, the design space for risk management in a market with a distinctly unique armament of risks requires pushing the boundaries of scalable protection products — moving past what TradFi or the current DeFi market has to offer.
Centralized alternatives to DeFi still convey many advantages to users that DeFi cannot match at the moment. High costs to access, low capital efficiency, latency issues, smart contract risk, mempool vulnerabilities, and a dearth of secondary market liquidity for protection products are all handcuffing the further growth of DeFi.
Eventually, institutional and mainstream demand will necessitate the rise of open, low-cost, full-stack asset protection infrastructure. Scalable protection instruments and risk analysis tools will unlock the next phase of DeFi’s growth, absorbing capital from TradFi in the process. UNION is designing an open platform of DeFi building blocks for creating a broader array of instruments and tooling that are imbued with the proven risk modelling of TradFi.
The goal is to create the cornerstone platform for risk management and asset protection instruments in a market poised for exponential growth.
The funding round will enable UNION to launch with its initial suite of protection products. These include but are not limited to transaction gas protection, collateralization ratio protection, and CDS-inspired smart contract coverage — among other capital protection pools and products. Moving forward, the goal of UNION is to stoke the creation of bundled protection that considers multiple layers of the DeFi stack, secondary markets for protection, and an inclusive no-KYC model that removes barriers to accessing risk management tooling.
Our fundraising partners draw from a wealth of experience in various corners of TradFi and DeFi. We’re excited to have their insight and support behind the UNION team and look forward to building the advanced risk management tooling necessary to catapult the DeFi sector to its next phase.
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