DinoSwap, which is positioning to become the next PancakeSwap but on Polygon (MATIC), raised $4.7 million from leading DeFi funds.
DeFiance, Hashed, Spartan Group, and DFG are some of the top venture capital funds that invested in DinoSwap ahead of its launch on July 17.
Sandeep Nailwal, the co-founder of Polygon, also invested in DinoSwap as an angel investor, along with notable names such as Terra co-founder Do Kwon.
DinoSwap is conceptually similar to PancakeSwap’s farming pools. It allows users to use the DINO token to earn various tokens of projects operating on top of Polygon.
DinoSwap on Polygon.DinoSwap
If DinoSwap garners enough traction and total value locked (TVL) in the near term, it has the potential to become the main platform to earn yield on Polygon.
What’s Behind The Hype Around Polygon?
Polygon rebranded from Matic Network on February 10, 2021.
Instead of being a scaling solution on Ethereum, Polygon set out to become a layer one blockchain protocol of its own.
Since the beginning, Polygon took a unique approach; it launched with many metaverse projects.
Projects such as Aavegotchi and Cometh moved to Polygon. The new update of MetaMask, the crypto web browser wallet loved by millions of users, made using Polygon even easier.
When a new layer one blockchain protocol emerges, the total value locked, or how much value in tokens are staked, usually goes up significantly.
This is because when new projects launch, they implement strategies to distribute their tokens to the community, incentivizing users to stake their crypto assets.
But the key is whether the TVL of a blockchain protocol or a DeFi application is sustained over the long term.
In DeFi, this is often called TVL stickiness and user retention.
For Polygon, this statistic has been extremely high. In fact, since April, the TVL of Polygon has increased from $1 billion to nearly $9 billion.
Despite the struggle of the crypto market in the past month, Polygon’s TVL has continued to climb upwards.
This indicates two things. First, Polygon has a loyal user base and strong user retention. Second, the blockchain network is already being established within the DeFi space.
The Thesis of Funds Behind DinoSwap
Hashed, the lead fund behind DinoSwap, and DeFiance, one of the biggest DeFi funds in the space, believe multi-chain liquidity farming would evolve into a highly potent market.
“DeFiance believes that multi-chain deployments will become the new normal for DeFi projects and the ability to capture attention (through liquidity) will be an important success factor. DinoSwap fills this gap by allowing projects to bootstrap attention/liquidity through novel DeFi concepts and sustainable yield farming, first on polygon and then other chains. We are excited to support DinoSwap in their quest towards a leading, cross-chain liquidity platform,” DeFiance told Forbes in an interview.
DinoSwap raises $4.7 million from top DeFi funds and Polygon founder.Getty Images
The Hashed team explained that the positioning of DinoSwap, as the main farming pool on Polygon, is unique.
“The Hashed team believes the Polygon ecosystem’s fast-paced growth will sustain over the long term and that DinoSwap’s positioning as the go-to farming pool within the Polygon market is unique,” the Hashed team said.
Disclosure: Hashed invested in DinoSwap, and I am also backing the project as an angel investor.