The recent collapse of the UST has once again demonstrated that many of the so-called stablecoins in today’s Web3 world are tied to high-risk and often unsustainable assets. As decentralized finance tries to expand its reach, it seems to be in dire need of finding other sources of return.
Over the past DeFi summer, USDC returns across lending protocols have ranged from 4% to 6%, says Md Halim, founder of DeFi startup ZeFi. Sometimes returns have gone as high as 9%.
“As the value of Bitcoin and Ethereum have appreciated, the demand for loans against them has skyrocketed, leading to higher returns. But now, as we grapple with fear and uncertainty in the markets, many big funds/whales suffered losses,” he said. “It caused a cascading effect on the players who lent to them. loans, leading to further declines in the prices of BTC/ETH and other assets.This is reflected in the contraction of TVL in DeFi protocols in terms of absolute units of locked assets.
The message is clear: “If you are a crypto user, you also need access to safer assets,” says Arun Devarajan, founder and CEO of MoHash.
Devarajan’s startup, MoHash, is working to fill that gap by harnessing real-world returns. The startup is building a decentralized finance protocol that will tap global capital and liquidity for alternative assets in fast-growing economies.
“We enable access to fast-growing economies whose growth makes sense…it is not tied to fluctuations in the crypto market. Crypto has a great trading use case, but it wobbles with the wind. There’s a lot more you can do with the same infrastructure and we’re trying to expand what it can do by bringing in high yield regulated assets,” he said.
MoHash has been working to solve this challenge for a year and has brought together several people experienced in technology and finance from companies such as Goldman Sachs, Amazon, Oliver Wyman, India Stack and Samsung.
The startup aims to begin transacting within the next few weeks and aims to serve institutional investors and high net worth individuals with check sizes typically over $1 million. “This solution has the potential to significantly bridge financing gaps for MSMEs across the globe, starting with India,” Ganesh Rengaswamy, co-founder and managing partner of Quona, said in a statement.
For Devarajan, MoHash is an opportunity to write above standards that can be used globally, he said. Devarajan previously worked at India Stack, a non-profit organization that developed several infrastructure protocols including UPI, which is now the most popular means of transaction among Indians.
“With OCEN (Open Credit Enablement Network, open standards to facilitate different aspects of the lending value chain), we designed a system where Indian platforms were able to raise capital from Indian lenders. The single standard worked across the Indian market. At MoHash, we write on top of a global standard on ERC20, and this standardization means we have access to global capital and liquidity,” he said.
The startup’s vision has already gained some support.
On Thursday, MoHash announced that it has raised $6 million in seed funding. The round was led by Sequoia India and Southeast Asia and Quona Capital. Ledger Prime, Jump Crypto, Hashed Ventures, Coinbase Ventures, and CoinSwitch along with Balaji Srinivasan and Polygon founders Sandeep Nailwal and Jaynti Kanani participated in the round.
“MoHash brings real-world assets to DeFi users worldwide and delivers sustainable, uncorrelated, hard-to-access on-chain returns for the first time,” said Shailesh Lakhani, Managing Director of Sequoia India and Asia. of the Southeast, in a press release.
“We believe this is exactly the type of product DeFi needs – one that leverages the strengths of blockchains and helps solve a real-world problem. We have loved working with them over the past few months and Sequoia Capital India is delighted to co-lead this financing.