During 2020, blockchains exploded in Total Value Locked (TVL) due to the proliferation of Decentralized Finance (DeFi). The DeFi movement started in 2017, with the genesis of a few core primitives allowing people to borrow, lend, and otherwise more efficiently use their capital. These primitives (also known as “money legos”), came in the form of protocols like AAVE, MakerDAO, Compound and Curve.
During the 2020 “DeFi Summer”, DAOs (Decentralized Autonomous Organizations) have also become a strong trend within the industry. DAOs allow users of these protocols to share in the revenue generated, as well as govern the direction of the protocol.
With this explosion of activity on Ethereum, gas prices entered the stratosphere, and the network has become inaccessible for the everyday person, who can no longer reasonably afford gas for even the most basic of transactions.
Enter Algorand, and several other Layer-1 blockchains like Solana, Avalanche, and Terra. These blockchains use a different consensus mechanism to ensure far lower fees, and far higher transaction throughputs.
The xBacked team saw an opportunity to build one of these building blocks of DeFi on Algorand, setting to work building a protocol for decentralized stable assets for the Algorand ecosystem. Our protocol allows people to use their ALGO as collateral by minting xUSD to put to use in the ecosystem in the form of investment, leverage, and a stable decentralized form of exchange.
With a highly functional team distributed around the world, we have members in APAC, Nigeria, and Mexico. A small but agile team of five, the xBacked team is loaded with skilled developers and a product manager building out the first version of the protocol.
Thanks to Borderless Capital leading the round, xBacked has raised $1.5m USD in its seed round. The round also included investment from Arrington XRP capital, additionally attracting new firms to the Algorand ecosystem. Having seen the success from their portfolio companies in Ethereum and Solana, Delphi Digital and Mechanism Capital have come into the picture. Their investment comes in educated anticipation of Algorand projects being built on one of the premier layer one blockchains.
Testnet for the xBacked protocol will be available in January with an initial closed launch to those who have joined our Discord and Telegram. A snapshot of this will be taken on Christmas eve, so please join and participate in our community for this exciting next step in our journey.
Community Telegram: https://t.me/xbackeddao
Announcement Telegram: https://t.me/xbacked
Introductory post: https://medium.com/algopulse/xbacked-a-decentralized-stablecoin-for-algorand-69f3f296efd2