With the support of some decentralized finance heavyweight investors, Australian startup Loda, a crypto-collateralized lending platform, has established its first liquidity pool.
Loda attracted over 15 investors who invested $15 million into the lender’s first of three completed institutional liquidity pools, according to a news statement issued on Friday.
Dion Dalton-Bridges, CEO and founder of Loda, told CoinDesk through Telegram on Friday that the two remaining pools, which are presently operational, will be completed when demand dictates.
Framework Ventures, Spartan Capital, One Block, Mechanism Capital, Liquefy Labs, Apollo Capital, Maven 11, Ledger Prime, and Cluster Capital were among the investors.
Signum Capital, X21, Flow Ventures, Autonomy Capital, KardiaChain, and angel investor Georgi Georgiev were among those who took part.
According to Dalton-Bridges, Loda’s first iteration (V1) is one of the first of its sort in the country, offering customers “one of the only methods” to borrow Australian dollars against crypto.
Users can park their crypto assets on the platform in exchange for dollars in order to gain rapid access to funds.
While banks do not accept cryptocurrency as collateral for loans for a house, car, boat, or vacation, Loda is seeking to give its users the ability to do so.
“A classic collateralized loan is when someone uses their home as collateral to borrow money. “All we’re doing here is offering a new form of collateral, which is the cryptocurrency itself,” Dalton-Bridges explained.
Those who believe in bitcoin as a long-term investment can borrow money in the short term and yet profit because the borrower “captures all the potential upside” of an increasing cryptocurrency price.
“This appeals to crypto holders who want cash but don’t want to sell,” Dalton-Bridges added. “The advantages of borrowing against crypto are that you are not selling your crypto but yet have access to cash in the here and now at cheap interest rates.”
Once the site goes live in August, the entrepreneur believes that a flat rate across all loans will be set somewhere around 5%.