Teller Closes $6.85 Million Strategic Raise from Blockchain Capital, Franklin Templeton, Toyota Ventures, and More to Decentralize Unsecured Lending of Crypto Assets
Teller, a DeFi protocol that enables unsecured digital asset lending and borrowing, announces a strategic funding round led by Blockchain Capital to build an open order book protocol that can be used by third parties to build their own marketplaces for unsecured DeFi lending. Franklin Templeton, Toyota Ventures, Bessemer Venture Partners, Upstart, Signum Capital, and others also joined to fund the project, alongside angel investors from Paypal, Fundera, and Bison Trails.
“Teller is paving the way for a traditional financial primitive to enter the DeFi space: data-driven, unsecured lending and borrowing of crypto assets. The ability to append off-chain data to a loan request will transform how individuals and lenders interact with DeFi and unlock lending opportunities only currently available in traditional financial markets,” said Ryan Berkun, Teller’s Founder and CEO.
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The decentralized Teller Protocol works similar to a limit order book and enables borrowers to associate off-chain data with on-chain loan requests. Lenders and borrowers that have matching bids/asks, based on the data provided or required, transact directly. Those requesting to borrow assets propose a loan request, and those supplying assets commit those assets to loan requests of their choosing.
“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.”
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“The infrastructure bridge between traditional finance and decentralized finance (DeFi) is inevitable, and Teller’s protocol is a key anchor aiming to re-architect the future of credit,” said Jim Adler, founding managing director of Toyota Ventures. “Teller is designed to bring the efficiency, access, and compliance of traditional finance to DeFi. It is one of the many reasons we’re so excited to mark the Teller investment as our first foray into fintech.”
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.
Using the Teller Protocol, institutional lenders and capital providers will be able to create their own automated data-driven criteria for committing assets to lend, based on rules and filtered by borrower request information. This new layer of DeFi – decentralized lending software that regulated parties can access in an easy to use way – will broaden the appeal of DeFi into a wider scope of participants in global capital markets.
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