PlutusDeFi completes US$1 million fundraise as work begins to create the first “DeFi full stack” platform. PlutusDefi has never had small dreams. To us, Decentralized Finance “DeFi” is a belief in absolute freedom. Every other DeFi project or start-up is a half-step towards truly taking control away from corruptible centralized bankers and financial institutions and dismantling the classist economic system which locks out too many people. PlutusDefi is a tech solution to achieve a total decoupling and true sovereign wealth for everyone with our strong focus on anonymized privacy at the protocol level.
The Decentralised Finance space is a buzz with technological advances which would normally take a decade but is happening within weeks. Compound’s new governance token (COMP) locked in US$1 billion within a few days to overtake Maker. DeFi tech teams across the world like ours have been renewed with passion and a drive to keep on developing DeFi – as if there is no bear market.
Undisputedly, DeFi is the hottest topic in the blockchain space, but that territory comes with its celebrations and dangers. While monthly volume within DeFi Protocols and Decentralised Exchanges (DEX) continues to grow on a month-by-month basis in the hundreds of millions and a TTM trend pointing upwards; there are downsides.
On Sunday night and monday afternoon, Balancer Protocol, A non-custodial portfolio manager, liquidity provider, and price sensor (also known as an automated market maker) based on complex mathematical equations was subjected to a ‘Flashloan attack’, the debate on whether flash loan attacks are purely legitimate economic arbitrage or financial manipulative attacks is still waging.
This generation of DeFiers pushing the space are crypto-financers often far ahead of the class and there are drawbacks; there are a lot of untested complex financial transactions on main-nets with no real testing.
With all that said, London has become something of a darling of the DeFi space, you’d might not have assumed it but there are several leading DeFi projects, theorists and academics residing in our city, most of which are quietly building while gaining the attention of those who know the difference between good and bad quality code, to mention a few; Aave, Argent, Aztec, PlutusDefi…
My role as co-Founder of PlutusDeFi alongside Ali Hararwala, is challenging, our small role in the space with 2019 was to become an aggregator of DeFi lending protocols. Have you ever tried to use a DeFi product? Most of them fail to even let the users know what numbers & assets they are entering and where those numbers are going. Having a DeFi platform focused on aggregation of the multiple wonders of DeFi serves as a reduction in the barrier to ordinary people plugging into decentralised financial technology.
Founders raising funds can be difficult. I think that founders should move away from the days of multiple-million pound valuations and move to something more in line with investors. There is a myriad of tokenomic gymnastics which can incentive investors to participate in projects based on token models.
Hybrid Bridge Toll/Bonding Curve Model
We’ve developed a new way to do tokenomics and fundraise while keeping projects aligned with all of their investors and utility token participants. Enter the ‘hybrid bridge toll /bonding curve model’.
Seed round investors are charged a fee in the form of a token burn when ‘crossing’ a bridge, to the liquidity side of a projects ERC-20 contract, thus causing rapid deflationary pressure.
Raising the second fundraising rounds is complex as there is often little incentive left on the table. This is where the bonding curve model comes into place, whereby most simply explained as x * y = k, states that trades must not change the product (k) of a pair’s reserve balances (x and y). Because k remains unchanged from the reference frame of a trade, it is often referred to as the invariant. This formula has the desirable property that larger trades (relative to reserves) execute at exponentially worse rates than smaller ones.
In practice, if PlutusDeFi applies a 0.30% fee to trades, which is added to reserves. As a result, each trade actually increases k. This functions as a pay-out to liquidity providers, which is realized when they burn their pool tokens to withdraw their portion of total reserves. In the future, this fee may be reduced to 0.25%, with the remaining 0.05% withheld as a protocol-wide charge. By listing blocks of tokens onto a decentralised listing, there is an upward curve achieved in the pricing.
This new model paves the way for an incentive structured for everyone an ecosystem which places a utility token as the primary form of capturing value. There must be no way in which projects deviate from this. We’ve closed our fundraise in a matter of days in what was supposedly the bear market. Key investors in the latest round include the CEO of Bitcoin.com, a Partner at LaunchTeam, General Partner of Neo Global Capital and the Founder of Sammantics.com.
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