Stablecoin protocol Level has rasied $2.6 million in a funding round

Quick take:

Stablecoin protocol Level has raised $2.6 million in a funding round led by existing investor Dragonfly Capital.

This was announced by the company on Thursday. Participation in the round also came from previous investor Polychain Capital. New investors in the round include Flowdesk, Echo syndicates Native Crypto and Feisty Collective by Path, and angel investors Sam Kazemian of Frax and Albert Chon of Injective.

The fresh funding brings the total raised to $6 million, founders David Lee and Kedian Sun told CoinDesk.

According to the announcement, the company plans to use the fresh capital to expand its yield-bearing token lvlUSD, amid a rising demand for yield-generating products. The lvlUSD’s main source of yield is decentralised finance lending protocols and plans to add Morpho, the lending protocol for on-chain loans to its yield sources within weeks. The teams also plans to expand the utility for the lvlUSD stablecoin beyond staking.

Users can earn on-chain yield by staking Circle’s USDC or Tether’s USDT stablecoins. The lvlUSD has been integrated with multiple DeFi protocols including Pendle, Spectra and LayerZero, and can be used as collateral on Morpho.

Commenting on the announcement, Sven Wellmann of Polychain said in a statement: “Their fully on-chain, transparent approach to yield generation sets them apart from competitors relying on opaque, centralized methods. We're excited to see Level continue to innovate in the DeFi space.”

According to Level, the lvlUSD stablecoin supply has already surpassed $80 million, just five months since its Beta launch. The team believes the protocol can achieve a market cap of $200 million to $250 million.