Investors have backed the vision of DeFi protocol Velar to the tune of $3.5 million. Velar, which is busy building a sophisticated suite of DeFi products on Bitcoin, won capital from a slew of high-profile VCs and family offices including Bitcoin Startup Lab, CMS Holdings, and Black Edge Capital. Cem Özer and Alexei Zamyatin, both of whom are developing Bitcoin L2s in their own right, also participated in the round.
Velar is deploying the world’s first perpetual DEX on the eponymous blockchain in a bid to turn Bitcoin into a veritable DeFi powerhouse. It is also gearing up for the mainnet launch of Dharma, which it describes as the first ever Uniswap v2-inspired AMM built on Stacks. The soon-to-launch platform will leverage Stacks’ L2 architecture to enable liquidity for DeFi dApps on Bitcoin, with the AMM expected to arrive in Q2.
Making Bitcoin DeFi’s Base Layer
While over 950 DeFi protocols currently live on Ethereum, there are just 11 Bitcoin-based equivalents according to DefiLlama. Although Ethereum remains the dominant DeFi network by Total Value Locked (TVL), DeFi activity on Bitcoin is on the march thanks to projects like Stacks and Ordinals, the latter of which enables users to turn satoshis into non-fungible tokens.
Reflecting on the recent raise, Velar Co-Founder and CEO Mithil Thakore said, “Velar’s successful funding round is a validation of our mission to make Proof-of-Work and Bitcoin the base layer of DeFi. Velar is set to redefine what’s possible, facilitating $800 billion worth of dormant liquidity to be used in DeFi. We’re excited to invite the world to be a part of this groundbreaking journey.”
With many industry voices predicting a Bitcoin bull run in light of the upcoming Halving event, Velar is on a mission to offer BTC holders the kind of value proposition and yields more commonly associated with not only Ethereum but L2s like Arbitrum, Polygon and Avalanche.
To date, the incentives associated with holding bitcoin have largely come from gradual price appreciation or, providing one times the market correctly, trading. Velar plans to change that, paving the way for institutions and regular hodlers to utilize their dormant BTC in multipa ways, including as collateral in a non-custodial way. Another avenue will be to lock bitcoin in a liquidity pool in exchange for yield or participate in Velar’s proposed token launch platform.
Last year’s Velar AMM testnet saw over 165,000 wallets created, a new benchmark for a Bitcoin-centric DeFi venture. The company is the brainchild of Thakore, Jakob, Tejinder Singh Mor and Aravind Sathyanandham, all of whom have extensive experience of working and building in the crypto space.
Bitcoin Ready for DeFi 2.0
Velar’s commitment to bringing fresh financial primitives to the evolving Bitcoin DeFi space comes at a time of renewed optimism for the cryptocurrency, particularly following regulatory ETF approvals in the US. If the platform can furnish DeFi users with the sort of functionalities they have come to expect, Bitcoin could be as much a part of DeFi 2.0 as Ethereum.
