In the last two years, institutional interest in decentralized finance technology has exploded. Alkemi Network, one of the world’s first decentralized liquidity network to offer institutional DeFi, created a platform that works for both traditional DeFi investors, and institutions that want to enter the DeFi ecosystem.
Financial technologies are held to a high standard by institutional investors and regulators. While DeFi was able to create a huge following in the crypto community, DeFi has been less successful in attracting institutional investors that are bound by regulations and covenants.
The simple fact is that while there is basically no yield to be found in established financial markets, gaining 10%+ per annum in DeFi staking markets isn’t difficult. At first institutions overlooked these markets, but those days are over.
Alkemi Network Opens Doors for DeFi
Alkemi Network was founded with the goal of connecting DeFi and CeFi, with the understanding that liquidity will make both markets stronger.
The platform operates on the basic idea that connecting the two markets will create synergies, and boost development across the board.
Alkemi is launching an on-chain liquidity network with a set of tools and products that act as onramps for everybody to have access in DeFi, starting with a core team of worldwide distributed, specialized engineers and designers.
The platform launched its mainnet after raising $4.6 million in funding and seeding the network with over $5 million in liquidity deposits. Alkemi Earn, the company’s main borrowing and lending protocol, enables compliant, frictionless access to DeFi for centralized financial counterparties.
Alkemi has focused on product, network reach, and community development over the last six months, while also closing a round of funding and onboarding 25 liquidity providers.
Through Alkemi’s principal ‘permissioned’ liquidity pool of digital assets, the flagship protocol, Alkemi Earn (Earn), provides institution-grade borrowing and lending in a compliance environment (ETH, wBTC and stablecoins).
At the network’s Token Generation Event, Earn will also provide access to Alkemi’s secondary ‘permissionless’ digital asset liquidity pool.
Behind the success of Alkemi Network is a strong collaboration by a global group of specialists with expertise in cutting-edge software technology, finance, and product development.
The platform is headed by founder and CEO – Ryan Breen, Co-founder & CSO – Brian Mahoney and Ben Cooper – Co-founder & CXO.
Moreover, Outlier Ventures, Asymmetries Funds ,Techstars, ConsenSys Mesh, GBV Capital, a195 Capital, Shift Markets, Genblock Capital, and Autonomy Capital, among others, have invested in the company, as has strategic angel investor Joyce Yang of GCR.
A Meeting of the Markets
Why does a split between CeFi and DeFi matter, and why should investors care?
The Internet was created to exponentially increase information and data sharing, but one critical piece of infrastructure was overlooked: inherent value transmission at the protocol level.
This is where digital assets and decentralized networks come into play, in which no single body has exclusive control over a data flow that includes both information and its value.
Within these networks, within the ‘finance vertical,’ there are two basic roads to innovation:
Decentralized Finance: Due to activities running on public permissionless blockchains, networks that function pseudo-anonymously might possibly be censorship resistant, cater to a worldwide market, and are significantly more transparent than legacy markets.
Open Finance: Open finance refers to the unbundling of banking services, in which API-enabled businesses provide specialised services in a geographically confined area. They are more commonly B2C focused and require AML/KYC.
It all boils down to whether or not one believes in the possibility of a world without capital controls, where value can move without boundaries.
The process of gaining access to digital capital has been democratized. Furthermore, capital scarcity is no longer a hindrance to progress. In essence, decentralized finance has broken down all the walls at a theoretical level.
This is where open and decentralized finance enter the picture and it’s why Alkemi’s open solution is tackling this opportunity head on. Once CeFi and DeFi are bridged, there will be no going back.
The Change is Here
Alkemi Network was officially founded in 2018 and a year later, its experience with TechStars was completed. In 2020, the network continued to expand through its Shift Markets partnership and opened up for investment from users.
At the beginning of 2021, its SAFE round was closed then following with the launch of initial Liquidity Providers and the Assets Under Protocol (AUP) reached up to $3million.
One of the most remarkable milestones so far is DAO setup that involved governance voting, and as a result, the foundation of Alkemi Network was officially established.
The platform continued to mark their development through a variety of important events such as the launch of permissionless pools on mainnet, an audit for the Alkemi Earn smart contract, the introduction of new products as a result of collaboration with many CeFi partners as well as their native token generation event.
WBTC, ETH, and stablecoins are the key markets for lending and borrowing activities of Alkemi Network. To overcome the Trusted Counterparty Problem is KYC/AML allowinglist, which process for the “verified” pool. To participate inside this pool, all members must pass KYC verification.
The trusted-counterparty environment is maintained by granting exclusive access to approved members.
One of the features that distinguish the platform is its institution-grade controls. The function includes both advanced reporting and accessibility to a multi-sig wallet, which provide comprehensive financial oversight.
Everyone is welcome to join the Alkemi Network. Alkemi has established an “Open” pool which is also another key feature with no permissions to provide a true DeFi experience to anyone who wants to interact without KYC verification.
Earn’s “Open” Pool can be linked into the growing DeFi ecosystem – like a frictionless money lego block. Another function that is attractive for investors is the Liquidity Mining Program. It rewards liquidity providers and 35% of the token supply will be allocated to them.
Alkemi’s platform connects digital assets to exchanges using a non-custodial architecture. The network solves the problem of digital asset market inefficiency by facilitating open access to liquidity and streamlining settlement for their clients.
Institutional capital allocators and partners including both exchange venues & third party providers are well served on the platform. Alkemi’s services, which are powered by decentralized liquidity pools, allow the platform’s customers to connect to their partners in a seamless and efficient way.
Alkemi: The ALK Token
ALK is Alkemi Network’s native token. The generation event will occur in July of 2021. ALK is ERC-20 type with the initial supply are 100 million tokens and total supply up to 200 million tokens which are expected to be distributed within 4 years.
The fundamental purpose of the ALK token is to provide network governance and an incentive for involvement with the platform. Holders of ALK will be able to propose and vote on protocol characteristics and attributes such as fee structures, market additions, and rate fixing.
Over the next four years, Alkemi’s Liquidity Mining Program will distribute 35 percent of the entire ALK supply (70 million tokens) to liquidity providers.
Approximately 8.32 ALK tokens will be produced and distributed to liquidity providers based on their participation in the “Verified” and “Open” digital asset pools at the time of each Ethereum block creation (currently around 15 seconds per block).
Alkemi is Making Real Connections Happen
Alkemi’s platform is purpose built to address one of the most important aspects of DeFi – connecting people to capital. It also makes it easy for institutional investors to enter the marketplace, and may become a flagship platform of a new era in finance.