Sturdy raises $3.9M for a new kind of lending protocol
Decentralized lending is one of the most important building blocks in DeFi.
To date, nearly every major DeFi money market follows the same core model: borrowers pay interest to lenders. But this mechanic is incompatible with an environment where lenders demand >10% APYs and borrowers have little reason to pay that much when lower-cost CeFi (or even TradFi) alternatives exist.
We’ve built Sturdy to bridge this gap. Rather than requiring borrowers to pay interest, Sturdy stakes their collateral and passes the yield to lenders. As a result, stablecoin lenders receive interest rates typically reserved for more volatile assets, while borrowers benefit from interest-free loans. Sturdy’s vision is to be the go-to protocol for lending or borrowing stablecoins on EVM-compatible chains.
To turn the vision into reality, we have raised $3.9M across seed and strategic rounds, led by Pantera with participation from Y Combinator, SoftBank’s Opportunity Fund, KuCoin Ventures, mgnr, One Block, Dialectic, and Orange DAO. “We are thrilled to be collaborating with these incredible partners, who bring deep experience across DeFi and traditional financial services,” said Sam Forman, CEO of Sturdy.
Paul Veradittakit, Partner at Pantera, said, “Positive-sum relationships are at DeFi’s foundation. Historically, lending has been zero-sum, with lenders only able to earn higher yields as borrowers pay greater interest. We’re excited to back Sturdy’s new kind of lending protocol in which lenders earn more and borrowers pay less.”
We’re thrilled to share that Sturdy will be launching on Fantom mainnet on March 21, with Ethereum mainnet slated for early Q2 2022. We’re excited to push the boundaries of what a money market looks like, and are grateful for the support from our partners and community.
Sturdy is a first of its kind DeFi protocol for interest-free borrowing and high yield lending. Rather than charging borrowers interest, Sturdy stakes their collateral and passes the yield to lenders. This model changes the relationship between borrowers and lenders to make Sturdy the first positive-sum lending protocol.