Level Secures $2.6M to Expand Yield-Paying Stablecoin lvlUSD

Stablecoin protocol Level has successfully secured a new round of venture capital funding, totaling $2.6 million, to expand its yield-paying stablecoin, lvlUSD, which currently holds an $80 million value. This capital raise is strategically designed to bolster the protocol's offerings in the decentralized finance (DeFi) space, where yield-generating digital assets are increasingly in demand amidst a cooldown in crypto prices. The round was led by early backer Dragonfly Capital, with participation from Polychain, Flowdesk, Echo syndicates Native Crypto, Feisty Collective by Path, and
investors Sam Kazemian of Frax and Albert Chon of Injective.This latest funding round follows a previous raise of $3.4 million in August, bringing the total venture capital funding to $6 million to date. Level's lvlUSD token competes in the fast-growing stablecoin asset class, which is a key piece of infrastructure for trading and transactions on blockchains. Unlike traditional stablecoins, Level offers yield to users by putting the backing assets to work on DeFi lending protocols like
, while automating its reserve management. Users can lvlUSD by depositing Circle's USDC or USDT stablecoins and lock up (stake) the tokens to lend out and generate yield on-chain. As of last week, the annualized yield for the staked version of lvlUSD stood at 8.3%, higher than tokenized money market fund yields.Level's approach to yield generation sets it apart from competitors who rely on opaque, centralized methods. The protocol's transparent and on-chain approach has helped its supply surpass $80 million in just five months since its beta launch. With the latest funding, Level plans to expand its team and marketing efforts while continuing to expand the utility of lvlUSD beyond staking. The protocol also plans to tap into Morpho to generate yield in the next few weeks, potentially pushing lvlUSD towards a $200-$250 million market cap, a key milestone the team aims to achieve.
The expansion of Level's stablecoin is part of a broader trend in the DeFi sector, where protocols are continually innovating to offer more attractive and diverse financial products. By securing additional capital, Level is positioning itself to compete more effectively in this rapidly evolving market. The protocol's focus on yield-generating assets aligns with the growing interest in DeFi among both retail and institutional investors, who are drawn to the potential for high returns and the decentralized nature of these platforms.
The capital raise will enable Level to enhance its technological infrastructure, improve user experience, and potentially introduce new features that will attract more users to its platform. This move is likely to strengthen Level's position in the competitive DeFi landscape, where protocols are constantly vying for market share. The protocol's ability to generate yield while maintaining the stability of its stablecoin is a key differentiator in a market where volatility is a common concern.
The success of Level's capital raise underscores the growing interest in DeFi and the potential for stablecoins to play a significant role in the future of finance. As more investors seek out yield-generating assets, protocols like Level are well-positioned to capitalize on this trend. The expansion of Level's stablecoin is a testament to the protocol's commitment to innovation and its vision for a more inclusive and decentralized financial system.

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