Interest-free lending protocol Hedge raised $3.7 million in a seed funding round. The round was led by Race Capital and was joined by other strong investors including Pantera, Solana Ventures, Shima Capital, DCM, AngelDAO, Vinny Lingham, SOLBigBrain, Ben Ling (Bling Capital), Tristan0x (Zeta Markets), Matt & Josh (Origin Protocol), Norbert Bodziony (Synthetify), Alfonso (Crossmint), Andriy (Allbridge), Gaingels and many others.
The project is planning for a public launch during the second quarter of this year as decentralized finance (DeFi) on Solana eclipses $6.7 billion in total value locked (TVL).
“Currently, there is a huge opportunity in the Solana ecosystem because 80% of Solana is not locked in DeFi,” Hedge co-founder and CEO Sebastian Grubb said in a statement. “With Hedge we’re really trying to upgrade the whole Solana DeFi ecosystem. We want to help users unlock more liquidity and better leverage their assets without having to exit their positions.”
Hedge offers interest-free loans that provide users with instant liquidity without creating a taxable event with ongoing interest payments. Users can deposit and borrow against their Solana (SOL) tokens, and Hedge provides the loans in USH, its dollar-pegged stablecoin.
On the collateral front, the loans can have up to 90% loan-to-value (LTV), a ratio between the loan amount and the value of the collateral.