The “Pipe for Crypto” is the first to bring cryptonative credit to DeFi through trustless revenue-based financing.
Founding team brings experience across both technology and finance from previous time spent at ConsenSys and JP Morgan.
Debt DAO announced today a $3.6 million seed funding raise. The round was led by Dragonfly Capital with participation from GSR, Daedalus, Numeus, Fasanara Capital, Spaceship DAO, and The LAO.
Angel investors include Balaji Srinivasan (Coinbase), Ryan Rodenbaugh (TrueFi), David Post (Chainlink Labs), Andrew Wilkinson (Galleon DAO), and Shreyas Hariharan (Llama)
Debt DAO is the “Pipe for Crypto” offering revenue-based financing to cryptonative entities like DAOs and protocols. Our innovative Spigot smart contract secures borrowers’ on-chain cashflows to automatically repay lenders. Because many DAOs have purely on-chain revenues, the Spigot is able to escrow 100% of cashflows if a borrower defaults. This is the first time on-chain loans have trustless protections for lenders that borrower’s revenue must be used to repay them.
Debt DAO is the one stop shop for cryptonative credit. We are building the coordination layer to buy, sell, underwrite and manage credit by aggregating lenders, borrowers and service providers into a single platform. While contributing at DAOs, we saw firsthand the lack of solutions for growth financing. With our extensive experience in DAO treasury management and market research, we have built a peer-to-peer Line of Credit contract to service the dynamic funding needs of growth stage DAOs.
"Right now, debt is one of the big missing pieces from the DeFi universe, and Debt DAO is one of the strongest teams in this space tackling that problem. As on-chain organizations and cash flows proliferate, revenue-generating DAOs will no longer need to sell off their native tokens for working capital. Debt DAO will pull the entire DAO financing ecosystem forward.” -- Haseeb Qureshi, Managing Partner at Dragonfly Capital.
Our Line of Credit smart contract (”line” for short) enables flexible repayment schedules and on demand liquidity. A single borrower’s line can support multiple lenders, multiple assets, and multiple interest rates. This means a DAO can take a loan in ETH and DAI and manage collateral and interest payments all in the same place very easily. It also creates a competitive lending environment where FRAX might try to undercut rates that FEI is offering a borrower or vice versa. The borrower can easily refinance in one transaction because they are all in one contract.
Competition - lenders can compete on interest rates within the same contract, giving borrowers the lowest interest rate possible in the market.
Flexibility - no fixed repayment schedule on line of credit drawdowns.
Liquidity - borrower can drawdown or lender can reduce/withdraw facility at any time.
Enforcement - revenue and/or asset based collateralization with our Spigot and Escrow contracts.
Assets - support for multiple assets per lender and per credit line allowing for ease of syndication (i.e. does not have to be solely in USDC from one lender).
Debt DAO is known for facilitating DeFi’s first debt financing round for Redacted, a meta-governance asset management DAO. Redacted used the $2.5m revolving line of credit for large protocol expenses such as contract audits. The revolver allowed Redacted to pay for their operational expenses without having to sell valuable treasury assets into deteriorating market conditions. This strategy maximized yield on treasury assets deployed to Convex Finance. Lender repayments were made out of income earned on Convex.
We are hiring for our product team to build the first generation of cryptonative credit products. We have been building in the space since 2018 and 2020 coming from ConsenSys and JP Morgan. We are committed to building on-chain, privacy preserving, and trustless financial products for cryptonative users. If you are a graphic designer, frontend dev, fullstack dev, or smart contract engineer and are interested in joining our team send us a DM. We are anon friendly ;)