ClayStack Crypto Staking Protocol Raises $ 5.2 Million in SAFT Sale

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ClayStack, a liquid staking protocol for cryptocurrencies, raised $ 5.2 million in a seed funding round.

The ride was secured through a simple agreement for the sale of future tokens (SAFT), ClayStack founder and CEO Mohak Agarwal told The Block. It was led by CoinFund and ParaFi Capital, with participation from Coinbase Ventures, the Solana Foundation, Animoca Brands and others.

Angel investors including Meltem Demirors of CoinShares, Larry Cermak of The Block, Robert Leshner of Compound and Stani Kulechov of Aave also supported the round, among others.

With new capital on hand, ClayStack wants to expand its team and launch the protocol by September, Agarwal told The Block. ClayStack’s current workforce is 12, and it plans to increase it to 25 by hiring designers, developers, researchers and technical writers, Agarwal said.

Liquid staking

Once launched, ClayStack will allow users to stake their crypto holdings with no lock-in periods or loss of liquidity. ClayStack will do this by issuing a synthetic or liquid derivative token, Agarwal said.

For example, suppose a user deposits 1,000 Polygon (MATIC) tokens. In return, they will receive 1,000 csMATIC tokens. ClayStack will stake the original MATIC tokens and send csMATIC tokens as a reward to the user.

CsMATIC tokens can be unlocked at any time by returning to MATIC, with no lockout period, Agarwal said. Being fungible, csMATIC tokens can also be used in the decentralized finance (DeFi) ecosystem to generate additional returns in the future, he added.

ClayStack can be compared to the Lido protocol, which currently supports Ethereum 2.0 (ETH2) and Terra (LUNA) staking and has nearly $ 2 billion in staked assets.

ClayStack will support MATIC, ETH2 and The Graph (GRT) tokens at launch, Agarwal told The Block. It plans to support more tokens, including Near (NEAR) and Solana (SOL), in the future, he said, adding that the plan is to also become a cross-chain protocol rather than just multi-chain and do it by interoperability.

As for ensuring the liquidity of the ClayStack protocol, Agarwal said that liquidity extraction incentives in the form of CLAY tokens will be granted to early liquidity providers. The support of investors and their communities will also be leveraged to this end, he said. The CLAY token will be launched after the protocol goes live, given market conditions, Agarwal said, adding that the goal is to launch it by the end of this year.

The funding round brings ClayStack’s total funding to date to $ 5.3 million. The project raised $ 100,000 in a pre-seed funding round last year. ClayStack could raise more funds ahead of the token launch, Agarwal told The Block.

2021 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.

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