Teller Finance , a blockchain project for decentralized unsecured lending, will be launching in October along with a governance token ($TLR), liquidity program and Compount integration. At launch of its public alpha, Teller will enable public mining of the $TLR token via contributions to its liquidity pool. Teller Finance’s lending application will have an immediate Compound interface and will enable users to earn additional $TLR and $COMP (Compound’s native token) by participating as lenders. Additionally, the Compound integration will allow Teller’s liquidity providers to earn Compound’s c-token interest rate on the unlent funds, stacking an additional return on the protocol’s overall APY and liquidity mining rewards.
“The DeFi industry has grown roughly 675% in the last 12 months to more than $10 billion in value, with most of its capital locked in debt markets,” said Ivan Perez, Teller Finance COO. “The latter is just a mere fraction of the more than $215 trillion global debt market. What we’re doing is lowering the barrier to entry to a currently undifferentiated market. Consumers can use their credit history and eliminate the need to collateralize debt. Beyond lending, the ability to price out risk will accelerate DeFi’s unprecedented growth. We plan to create a new class of financial instruments that combine traditional credit assessment with decentralized networks.”
Ahead of its launch, Teller Finance has sourced over $8 million worth of $DAI and $USDC in liquidity for loans via institutional partnerships, and through the DeFi Alliance’s newly launched Liquidity Launchpad Program. Teller’s liquidity mining program, capped at 10 participants and or $10 million in total liquidity provided, is limited to an institutional rewards pool commensurate to 1% of the total supply of its forthcoming governance token. Additionally, Teller has imposed a 3-month lockup on all capital contributed to the program, restricting all earned tokens to a vesting schedule equal to the length of the lock up. Teller has allocated an additional 29 million $TLR for public distribution over 12 months, constituting 29% of the network.
At the start, Teller Labs, consisting of founding team members, will dictate major governance decisions and regulate the protocol. However, the company will shift to a community-based proposal system once Teller’s network achieves sufficient adoption and distribution of TLR, the network’s governance token. Despite this, public alpha participants will have early access to the protocol’s smart contract governance.
“The Teller Finance team is cognizant of both the strengths and dangers of early decentralization of governance,” explained Michael Anderson, Co-Founder of Framework Ventures, Teller Finance’s lead investor. “Unlike other DeFi protocols, Teller is managing sensitive consumer data, subject to varying degrees of jurisdictional regulations, and working with a growing list of traditional finance partners and major API providers. They’ve taken a progressive decentralization approach that combines fair launch practices with a tactical expansion of governance focused on securitizing the network and its stakeholders’ interests.”
Unlike a standard erc-20 governance token, TLR’s initial core functionality is to allow for ongoing, decentralized governance of the protocol’s credit risk features. At launch, TLR owners will be able to submit, confirm, or reject pull requests to upgrade the protocol’s credit risk features.
“The Teller Protocol is resolving an essential problem for DeFi. Namely, lowering the barrier to entry for new DeFi users by pricing out risk, and reducing the industry’s need for collateralized debt positions,” said Robert Leshner, founder and CEO of Compound. “We’re happy to continue to contribute to the ecosystem’s growth by working with the Teller team.”
Incubated by A16Z’s crypto startup, Teller previously announced a $1 million seed round led by venture capital firm Frameworks Ventures, followed by Parafi Capital and Maven11 Capital.