Funding Obtained by Ion Protocol for Development of In-House Yield System, Nucleus, Aggregating $4.8 Million
Ion Protocol, a blockchain startup, is building a rollups and appchains layer that aims to address monetization issues. The company recently secured $4.8 million in a funding round, with investors including Gumi Capital Cryptos, Robot Ventures, BanklessVC, NGC Ventures, Finality Capital, and SevenX Ventures.
The funds will be used to accelerate the development of Ion Protocol's native yield platform, called Nucleus. Nucleus is designed to offer decentralized apps, networks, and users the opportunity to earn yield by depositing any staked or restaked asset.
Nucleus provides yield by enabling decentralized lending and borrowing across various blockchains, including Ethereum, Bitcoin, and USD-backed stablecoins, through a cross-chain oracle framework and collateralized loans. It aggregates liquidity and interest opportunities from multiple networks to optimize yields for users.
To minimize liquidation risks, Nucleus employs several mechanisms. Overcollateralization ensures that borrowers lock up more collateral than the loan value, reducing the chance of under-collateralized positions. Dynamic collateral management adjusts collateral requirements based on market volatility. Cross-chain oracles provide real-time, reliable price feeds that help correctly value collateral and loans, preventing erroneous liquidations. Grace periods or liquidation buffers give borrowers time to restore collateral levels before forced liquidation.
Chunda McCain, co-founder of Ion Protocol, stated that participating in staking and restaking to generate yield is becoming and will continue to be a powerful economic incentive for crypto stakeholders. The yield is then passed on to depositors.
Ion Protocol's platform also allows networks to provide users with the option to maximize the value of their bridged assets and bring new sources of revenue to their ecosystem. It enables rollups to innovate on their pre-existing business models and ecosystem design while making depositing truly compelling for users.
Additionally, Ion Protocol has built a zero-knowledge machine learning framework that underwrites the credit risk, enabling "hyper-efficient loans" with minimal liquidation risk.
While the specific mechanisms of Ion Protocol’s Nucleus related to yield generation and liquidation risk management for Ethereum, Bitcoin, and USD-backed assets are not fully detailed in the provided search results, official whitepapers or platform documentation would provide further insight.
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