DeFi Adoption: Andreessen Horowitz Invests $25 Million In Compound Lending

Decentralized Finance (DeFi) is among the fastest-growing trends that are based on blockchain. The well-known venture capital firm Andreessen Horowitz has recently invested $25 million in the popular DeFi project Compound, thus continuing its involvement in the field.

$25 Million Raised For a DeFi Project

Andreessen Horowitz invested $25 million in the fast-growing project in the field of decentralized finance, Compound Finance. The latter is based in San Francisco and uses blockchain and smart contracts to allow its users to borrow and lend cryptocurrencies. Lenders provide the capital and earn interest rates while borrowers can take advantage of that capital by putting cryptocurrencies as collateral.

Compound Finance represents an open-source money market protocol and it’s built on the blockchain of Ethereum. It’s one of the more widely used products in the ecosystem of decentralized finance.

The large venture capital firm Andreessen Horowitz has a history with blockchain and cryptocurrency. Last year, the firm launched a cryptocurrency fund and raised over $350 million in assets. According to Chris Dixon, a general partner and head of the fund, the company sees lots of potential in cryptocurrencies regardless of the market’s volatility.

Additionally, it was recently announced that Andreessen Horowitz would be launching a crypto start-up school aiming to help blockchain entrepreneurs with their projects. Dixon also commented that their school would allow building different variations of business niches:

“If this works the way we hope it does, it will be a new way to build start-up. You can build social networks and marketplaces using a lot of these concepts that have pretty profound business and social societal implications.”

DeFi Investing

DeFi’s idea to recreate traditional financial markets on a decentralized platform has gained serious steam over the last year.

With the increasing interest in decentralized finance, more and more projects receive notable financial backing from various institutions. One example of this comes from InstaDApp – a DeFi portal that simplifies the decision-making process for asset choosing. The project recently closed a round of $2.4 million.

Coinbase, the largest US-based cryptocurrency exchange recently announced its plans to get involved in DeFi as well by creating a USDC Bootstrap Fund. It will be investing their previously launched stablecoin USDC directly in the protocols, thus supporting developers of DeFi projects.