Friday, June 21, 2024

Y Combinator and Citadel Alums Launch DeFi Lending Protocol Algofi on the Algorand Blockchain

Algofi today announces the upcoming launch of its fast, low-cost, decentralized lending market on the Algorand blockchain. The protocol is currently live on Algorand’s TestNet, with plans to launch on MainNet by Q4 of this year. The simple-to-use platform allows everyone from crypto-native traders to less tech-savvy retail users to earn high-interest yield on their cryptocurrency. Algofi will also feature seamless on-ramps for fiat currency into crypto on Algorand, allowing users to begin earning yield on Algofi almost instantly.

Founders John Clarke and Owen Colegrove bring traditional finance backgrounds to Algofi, having worked on Citadel’s fixed income team before leaving to ideate a new decentralized finance solution, which took shape within Y Combinator’s summer 2021 accelerator and launched as Algofi in August 2021.

Algofi selected Algorand as its underlying technology partner due to the ready availability of robust developer tools which enabled the simple creation of smart contracts that power Algofi; the active and engaged community around Algorand; and the technology’s proven success in real-world financial use cases. In order to create a platform that is user-friendly on a mass scale, points of friction like high transaction fees and confusing bridging processes are untenable:

“Building on Algorand enables < $0.01 transactions compared to ~$15 or more on other incumbent networks,” said Algofi cofounder John Clarke. “High costs and slow transactions make decentralized lending markets inaccessible to the majority of potential users, so going with a Layer-1 proof of stake protocol like Algorand just made sense. We’re also excited to be a part of Algorand’s burgeoning DeFi ecosystem alongside the likes of Yieldly, Tinyman and Algodex, where we already see a lot of synergies.”

“Innovative thinkers like Algofi are building thoughtful and accessible DeFi solutions on Algorand,” said David Markley, Director of Business Solutions at Algorand. “Algorand’s secure, decentralized technology makes it easy and efficient for the development of disruptive financial products, and we are thrilled to see Algofi joining the expanding ecosystem of DeFi offerings that are based on Algorand’s open source technology.”

Algofi aims to be the first crypto-native bank to truly bridge the gap between traditional and decentralized finance. The initial lending protocol will launch for users everywhere in Q4 of 2021, with additional fiat on- and off-ramp solutions, and more, forthcoming.

“Using Algorand will allow us to do things that you can’t even dream of doing on, say, Ethereum,” Algofi cofounder Owen Colegrove told KryptoNurd‘s Monty Allen. “You can start imagining high-speed transactions where you’re making real world payments against your balances, or drawing a line of credit very seamlessly against your holdings in the [Algofi] platform….just facilitating real world interactions very cleanly.”

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