Multicoin Capital has led a $1.5M round in dForce, the world’s first unified network for open finance protocols. Coinvestors include China Merchant Bank International (CMBI) and Huobi Capital.
Building in Asia, where consumer “super-apps” like WeChat and Kakao are prevalent, dForce is building the first “super-network” of DeFi protocols. Originally coined by BlackBerry founder Mike Lazaridis in 2010, a super-app is defined as a ecosystem of many apps that people use every day because they offer such a seamless, integrated, contextualized and efficient experience. Building on this definition, a super-network is an open ecosystem of many protocols that offers a seamless and integrated experience bound together by native token.
The dForce ecosystem is bound together by $DF, its native platform token. Using the token, users of the dForce ecosystem can seamlessly traverse several financial protocols that allow them to lend, borrow, or earn all without switching platforms or tokens. The $DF token also enhances the entire network’s ability to cross-sell, drive viral incentivization, and encourage user referrals, and it unlocks a wide range of new capabilities for users, including staking, cross-margining, and fee discounting. Working across an integrated and interoperable platform, $DF compounds the value of each protocol in its network, and therefore has a multiplicative effect on the dForce ecosystem as a whole.
Super-apps are wildly popular in China and an integral part of the fabric of everyday life. dForce’s strategy is not by coincidence. The founder of dForce, emphasized that dForce had plans to hyper-localize in China, starting by expanding beyond the ETH community—which makes up the majority of the DeFi community today. Since then, the team executed flawlessly and partnered with the top exchanges, wallets, and mining operators. Today, they are an integral part of China’s DeFi fabric. In a matter of only five months, Lendf.me, dForce’s money market protocol, has grown to become the largest DeFi marketplace in China, and one of the top protocols on defipulse.
dForce started with USDx, a synthetic stablecoin pegged into a basket of stablecoins, then built Lendf.me, a money market protocol that provides liquidity for USDx (in addition to other stablecoins), and will soon be launching yield-enhancing and trading protocols to expand network utility further. Each of these protocols build on one another and enhance their value.
Centralized exchanges like Binance, Huobi, and OKEx are already experimenting with DeFi protocols tied to their respective ecosystem tokens, and they’re engaging with external DeFi protocols as well. For example, Coinbase provides USDC liquidity to Compound, and Huobi facilitates custodial BTC on the Ethereum network (HBTC) for use in dForce’s Lendf.me product. As these experiments mature, DeFi protocols and centralized exchanges will continue to mesh together, accelerating the transition to open finance.
According to the Founder of MultiCoin Looking back on the history of fintech on the internet, there is a clear trend of regional fragmentation in financial infrastructure: PayPal, Square, and Stripe in the US; QIWI in Russia; Alipay and WeChat Pay in China; LinePay in Japan, and so forth. DeFi protocols, for the first time in history, allow anyone in the world to access truly global liquidity pools and overcome the constraints of localized liquidity pools. Still, while it’s possible today for DeFi protocols to break down geographic barriers, cultural barriers will erode slowly. These behaviors and norms are ingrained at a much deeper level than the technologies that drive them—entrepreneurs need to localize their products for the users they serve. dForce has done this exceedingly well to date, and is positioned to become the super-network for Chinese and Asian crypto users broadly.