Alkemi Network positions itself as a decentralized liquidity network introducing institutional DeFi. More specifically, the project wants to bridge traditional finance with decentralized finance in a meaningful and lasting way. The team behind this project has a clear vision for the future and can change the finance industry at its core.
What Is Alkemi Network?
As the world’s first decentralized liquidity network with institutional DeFi support, Alkemi Network has high expectations to live up to. Bridging the gap between centralized and decentralized finance is no easy feat. The main objective is to bring CeFi institutions into the decentralized finance fold through compliant bridges providing DeFi access. Such an approach gives centralized institutions a chance to use DeFi in a trusted-counterparty liquidity environment.
At its core, the flagship protocol Alkemi Earn provides KYC/AML compliant non-custodial borrowing and lending. An appealing option for institutional investors and those seeking permissioned access to DeFi. Alkemi Network was founded in 2018 and hit the mainnet in late 2020. The project has raised $4.6 million through an investment round with over $5 million in liquidity deposits seeded. Now is a good time to take a closer look at the people behind this project.
The Origin of Alkemi Network
Co-founders Ryan Breen and Ben Cooper aimed to provide digital asset prime brokerage services in a non-custodial manner. Additionally, they envisioned a protocol with built-in borrowing and lending functionality. With the help of Brian Mahoney, who brought his CeFi expertise from his days at HSBC, Alkemi network turned into a bridge capable of connecting CeFi with DeFi. Bringing centralized finance institutions into the decentralized fold and exposing them to borrowing and lending is an important first step in the process.
The concept of “bridging CeFi to DeFi’ sounds easy on paper, but it is a tall order. Enabling centralized institutions – such as funds, family offices, exchanges, custodians, and others – to use DeFi in a trusted environment remains the primary objective. The DeFi protocol will keep expanding its reach and services over time.
The Alkemi Network solution primarily caters to institutional entities, including digital asset allocators, exchanges, and custodians. The team primarily uses word-of-mouth to get the message across, which remains a better and interactive marketing approach.
Notable Achievements And Future Goals
To date, the Alkemi Network team has launched out of stealth with a $4.6M funding round led by industry-leading DeFi and CeFi participants. As the project is live on the Ethereum mainnet and has begun generating revenue, there is growing interest in its Liquidity mining program. Nearly $26 million in gross funds have been deposited, and over $14.25 million has been borrowed.
Liquidity providers include Quantstamp, LedgerPrime, JST Capital, Shift markets, and others.
With support for DAI, USDC, WBTC, and WETH, the main interest is in USDC, for the time being.With its bank-grade KYC/AML framework to fulfill CeFi institutions’ compliance requirements, Alkemi Network is on the right path to bringing CeFi to DeFi.
Future iterations of the protocol will introduce a permissionless pool – users can deposit Ethereum-based assets to lend and borrow to earn ALK rewards – and participation in staking pools. The team also aims to introduce Alkemi Vaults to take the next step in bringing CeFi to DeFi.
For now, Alkemi Network primarily attracts small/mid hedge funds, whereas larger hedge funds remain behind the adoption curve and remain cautious. Decentralized finance introduces many opportunities but also comes with a steep learning curve and validation requirement. Nevertheless, progress is being made on this front by the team members.