ParaFi Capital, a San Francisco-based investment company focused on blockchain and decentralized finance (DeFi), invested in Kyber Network ahead of Katalyst's planned update.
On Friday, the two companies announced that they have partnered to prepare for the launch of KyberDAO with the intention of increasing the adoption of the liquidity protocol on Kyber's chain. KyberDAO is designed as a community platform for decentralized network governance.
A partnership to better integrate into DeFi
Arrived at a time when decentralized finance is booming, ParaFi's investment was made in the form of a direct purchase whose details of Kyber Network Crystals (KNC), the project's native token, are unknown.
Kyber Network is an Ethereum-based protocol that aims to increase liquidity and facilitate swaps for ERC-20 standard tokens. Kyber intends to draw on ParaFi's experience in DeFi and the company's knowledge of investments and market making to build liquidity infrastructure, said the Kyber team.
“ParaFi Capital has been a driving force in the governance and growth of DeFi. With their support and active participation in KyberDAO, we are confident that we can take Kyber to the next level of liquidity for DeFi, "said Kyber CEO Loi Luu.
The investment company will also participate in Kyber's governance, or community decision making, by targeting KNC and voting on KyberDAO using the purchased tokens. Kyber said ParaFi will also link professional market makers to DeFi through Kyber's liquidity supply system called Fed Price Reserve (FPR).
ParaFi is best known for receiving investment capital from billionaire Henry Kravis, co-founder of KKR, in June 2019. He also had the support of Bain Capital Ventures and Dragonfly Capital Partners.
According to Crunchbase, ParaFi had previously invested in the Coinbase cryptocurrency exchange and the stablecoin developer MakerDAO. “We worked closely with the Kyber team for their crypto-economic redesign and the transition to a decentralized autonomous organization (DAO) with Katalyst.
Kyber's growth trajectory and the breadth of integrations in the DeFi stack are impressive, as they evolve into a liquidity protocol for the ecosystem, "said Santiago Roel Santos, partner of ParaFi Capital.
DeFi an opportunity for the future
DeFi has been a hot topic in recent days due to the emergence of Compound (COMP), the project that is carving out a sizable portion of DeFi's market share, positioning itself at the top of the list in terms of total market value.
Taking advantage of the buzz, FTX, a cryptocurrency exchange, recently moved on to the list of token-based derivatives a few days after its launch. "I believe that the DeFi protocols will continue to experience an explosion of interest for years to come," said David Freuden, co-author of a recent report entitled "DAO - A Decentralized Governance Layer for the Internet of Value."
