Ethereum-based Decentralized Foreign exchange startup company DFX Finance has managed to raise $5 Million in a single seed round on Tuesday. This is a huge plus point as the gathered funds will help in the rapid growth of the company.
The seed round was led by funding from investors Polychain Capital and True Ventures. Many other investors included Hex Capital, Boost VC, CMS Holdings, FBG Captial, DeFi Alliance, SRC Captial, CMS Holdings and Lemniscap that took part in the successful seed round, giving a boost in confidence to all founders and workers to continue on with the project. Investor Polychain has played a big role in the DEX ecosystem as it also previously invested in projects such as DeriviDEX and DEX Manta piracy network.
How Does DFX Finance Work?
With the implementation of a dynamically tuned bonding curve for stablecoins, the curve allows for trades to occur in an efficient way. In every pool, the number of tokens serve as a pivot point that is fixed in the bonding curve, dynamically changing according to the price oracle (external).
The company seeks investors who want to issue fiat-backed stablecoins in their respective countries, bringing volume and liquidity to stablecoins that are backed by fiat currencies.
The website states that the adoption of Web 3.0 requires assets that are protected from price volatility, so by focusing on fiat-based stablecoins on the Ethereum blockchain, we leverage the existing DeFi ecosystem to push forward humanity’s next generation of foreign exchange.
Future Prospects And Aims Of DEX Finance
Furthermore, DFX Finance also announced the launch of a dedicated governance token DFX, focusing its liquidity mining on three stablecoins, EURS, CADC and XSGD, respectively. The DFX token holders will be given the right to suggest and vote for future protocol changes.
Co-founder of DFX, Kevin Zhang, stated in an interview that the company aims to build a well-focused team to peruse scalability initiatives that produce more stablecoins over the coming year. He said that liquidity mining would stimulate the use of USD-based stablecoins. We want to build an infrastructure to enable on-chain FX swaps that can reduce slippage, provide the utmost utilities and optimize capital to create a new market for non-USD currencies to gain the attraction of the global crypto space, Zhang added at the end.