Over the last week, nearly $60 million was raised by 11 crypto startups — with a primary focus on liquid staking or smart contract security.
Helio Protocol, the company behind a liquid staking derivatives solution, secured the highest funding among the startups, as Binance Labs invested $10 million into their project.
Binance Labs reported that the protocol has $300 million locked in total value. This mainly comes from over-collateralized lending using its decentralized stablecoin HAY, with the protocol itself conducting the lending.
The platform offers “multi-chain [staking-as-a-service] and [liquid staking derivatives] services,” managed through Synclub. Notably, Helio merged with Synclub back in July, streamlining their operations.
Mom, get the camera 👋 📸
It's time to share some amazing news: we recently closed an oversubscribed $5 million seed raise backed by an incredible array of supporters!
This is a huge moment for the platform & the special community we've all built together.
Here’s what’s ahead! pic.twitter.com/Dt3JdV5ZYu
— fxhash (@fx_hash_) August 8, 2023
Due to the merger, Helio will include more liquid staking tokens for transactions. Synclub already supports native staking for polkadot (DOT), cosmos (ATOM), Tron (TRX), and Binance Coin (BNB).
Yi He, a co-founder of Binance, underlined Binance Labs’ dedication to advancing the decentralized finance sector by supporting initiatives such as this one.
“We have seen tremendous potential in the LSDfi sector, which plays a crucial role in driving the overall growth of the DeFi ecosystem. We look forward to working with Helio and Synclub and hope to see the project grow as a leading LSDfi protocol on BNB Chain and other blockchains,” Yi said in a statement.
With the funds, Helio Protocol plans to grow its team, spread out collateral among more staking providers, and improve its infrastructure for multi-chain development.
With +350k downloads, Xverse sets a new standard for Bitcoin wallets.
— Xverse – Bitcoin Wallet for Web3 (@xverseApp) August 10, 2023
Puffer Finance, another startup in the field of liquid staking, garnered $5.5 million in a seed funding round co-led by Lightspeed Faction and Lemniscap. Brevan Howard’s cryptocurrency branch, a notable asset manager, was also a major investor.
According to an update on Medium, Puffer’s decision to raise funds for its products was influenced by the Ethereum Shapella upgrade, which transitioned the network to a proof-of-stake model.
Puffer’s concern revolves around the potential for centralized liquid staking providers to outpace their decentralized counterparts.
Puffer aims to make home staking economically more viable to address this concern by protecting stakes from slashable offenses using their Secure-Signer tool.
Moreover, as mentioned on their website, those staking from home can join the Ethereum network through Puffer’s pool with only 2 Ether (ETH).
“Anyone can run a Puffer Node from their home to operate Web3 infrastructure and play a pivotal role in shaping a Web3 that is resilient and censorship-resistant,” wrote Amir Forouzani and Jason Vranek, the founders of Puffer.
Puffer aims to increase Ethereum's resilience by amplifying decentralization and reinforcing censorship-resistance.
We have secured $5.5M in a seed round to develop a protocol that reduces slashing risk and increases the viability of at-home stakers.
— Puffer Finance (@puffer_finance) August 8, 2023
Funding for the security of smart contracts
Alchemy’s Q2 2023 developer report revealed that developers are mainly interested in enhancing the security of smart contracts.
Three startups focusing on smart contract security raised substantial funds the week after the report came out. One of them, Cube3.ai, raised $8.2 million in seed funding for its three blockchain security products — Detect, Protect, and Manage — with all three working together to monitor and stop malicious transactions on the blockchain.
Spearbit, another security-oriented startup, raised $7 million to create Cantina, an open marketplace for Web3 security auditors. The funding, led by Framework Ventures, will also support the hiring of more software engineers.
SphereX is the third company to raise funds in the sector. It secured $8.2 million in seed funding at a $24 million valuation, with backers like Aleph, Pillar VC, Fabric Ventures, Mensch Capital Partners, and other angel investors. Their flagship product, SphereX Protect, is a security solution for smart contracts that prevents hackers from taking advantage of code vulnerabilities.