Altitude, a DeFi lending service that automates dormant funds in overcollateralized loans to seek additional yield opportunities, has announced the completion of a $6.1 million seed round of financing. The company has developed a novel approach to DeFi lending, aiming to maximize capital efficiency while maintaining a safe liquidation risk profile.
Blockchain technology has revolutionized lending mechanisms, allowing users to borrow funds without any credit history, Know Your Customer (KYC) verification, or registration. This has led to lending becoming the main use case in decentralized finance (DeFi), accounting for over one-third of the total value locked (TVL) in DeFi apps as of the end of 2023. However, the requirement for overcollateralization has resulted in high capital inefficiency in the DeFi lending and borrowing markets.
Altitude’s solution to this problem is to automate the management of collateralized debt by adjusting the loan-to-value (LTV) ratio in real time. If the value of the collateral increases and Altitude determines that a loan has excess available collateral, the protocol allocates it to various platforms to generate income. If collateral is suddenly needed back to secure the loan, the protocol automatically rebalances the loan to maintain the targeted LTV.
Altitude also connects with major DeFi lending protocols and yield aggregators to get better rates and seek yields. When users take out loans from the Altitude vault, the system optimizes their capital by refinancing user loans continuously at the best available rates, actively managing the dormant capital to generate yield, and repurposing the generated yield to reduce the user’s debt. This approach gradually reduces the debt even when users fail to repay it.
Altitude has successfully completed on-chain testing and will soon move to a closed beta, available to whitelisted addresses, followed by a full launch. As the protocol gains traction, the company plans to expand to other EVM-compliant L1/L2s and integrate with all leading lending protocols and yield sources.
The company has already attracted interest from major players and recently completed a $6.1 million seed round. Previously, the protocol secured $2.1 in pre-seed funding from a pool of Web3 builders and then raised a further $4 million from Tioga Capital, New Form Capital, Flow Ventures, UDHC, GSR, Owl Ventures, alongside prominent angel investors, such as Marc Zeller of AAVE as well as others, to close out the round.
Michiel Lescrauwaet, managing director at Tioga Capital, commented on the investment, stating that Altitude’s novel approach will catalyze the next wave of growth by giving DeFi investors peace of mind while generating better yields.
Altitude was founded by a collective of Web2 and Web3 veterans, with the aim to transform the DeFi lending space by maximizing capital efficiency. Tobias van Amstel, one of the co-founders of Altitude, expressed that they are building Altitude to automate what people do every day to ensure their capital is working as hard as it can.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Global |
| Countries | |
| Sentiment | positive |
| Relevance Score | 1 |
| People | Tobias van Amstel, Marc Zeller, Michiel Lescrauwaet |
| Companies | Aave, UDHC, New Form Capital, Altitude, Owl Ventures, GSR, Flow Ventures, Tioga Capital, Compound |
| Currencies | Aave, Bitcoin, Ethereum, US Dollar, cETH |
| Securities | None |
