DeFi Protocol iZUMi Finance Raises $30M, Launches Exchange

iZUMi Finance, a multichan decentralized finance (DeFi) platform, has raised $30 million through the sale of bond vouchers and claims on its iZUMi Bond USD (iUSD), the firm said Friday.

Singapore-based iZUMi Finance offers liquidity services, or the conversion of one asset into either cash or another asset. The platform is deployed on the Ethereum, BNB Chain, Polygon and Arbitrum blockchains and has about $58 million in total value locked (TVL), according to DefiLlama data.

Along with the funding, iZUMi announced its new iZiSwap decentralized exchange (DEX), which employs a novel automated market maker (AMM) protocol and the iUSD token.

"Liquidity is the catalyst for growth in DeFi. With the launch of our Discretized-Liquidity AMM and iUSD, iZUMi Finance is eliminating the barriers to liquidity and making DeFi more attractive and efficient for market participants," iZUMi co-founder Jimmy Yin said in a press release.

Funding

The iUSD token is 1:1 pegged to the U.S. dollar, akin to a stablecoin, and it's backed by iZUMi’s collateral and future revenue. IZUMi issues and sells iUSD to private investors.

The new funding included $20 million from institutional investors Ivy Ventures, Cobo and Mirana, among others. More than half of that total came from a voucher sale on the bond-focused Solv Protocol. iZUMi also sold $4 million BUSD worth of the vouchers and an additional 5,000 in BNB, which is equivalent to about $2 million.

Decentralized exchange

The new iZiSwap exchange is built around a so-called "discretized-liquidity" AMM. An AMM is simply the protocol that powers a DEX. The discretized liquidity part is more complicated.

The DLAMM model optimizes the price ranges and amount of liquidity for the providers. The end result is a lack of slippage, or difference between the expected price and the executed price in a transaction.

“Let’s say you go to a bank and transfer your USD into GBP. You can’t always get the exact amount of equivalent GBP because there’s transaction fees from the bank and fluctuating exchange rates,” Yin told CoinDesk over Telegram. “DeFi solves the transaction fee part by lowering it significantly compared to banks, and we take good care of the part where the exchange rate will be as favorable to you as possible.”