Teller funding round has helped the startup raise $1 million from the investors. The event featured Parafi Capital, Framework Ventures, and Maven11 Capital. Blockchain-powered Teller makes solutions for a decentralized lending marketplace. It plans to use the latest capital infusion to create an algorithmic credit risk protocol to be used in DeFi.
— Teller Finance (@useteller) July 16, 2020
The Teller project will be a first-of-its-kind project that will integrate traditional credit score data taken from sources like Equifax with decentralized marketplaces. In simple words, real-world credit scores will now be available for DeFi lending protocols.
Teller funding round opens up new DeFi possibilities
Teller funding round is the latest example that reflects the current exuberance of the DeFi realm. To date, DeFi apps have garnered $2 Billion plus in cryptocurrency and approximately $1.2 Billion in overcollateralized lending apps.
DeFi applications, including Compound and Aave, are making use of smart growth strategies like yield farming to further grow the overcollateralized systems further. Still, DeFi is yet to impress the conventional onlookers when it comes to lending needs. Teller funding money would be used for progress in the same direction.
Ryan Berkun, the founder of Teller, says that the real success of DeFi lies in attracting lending clients from mainstream channels. Yield farming merely gives transient bootstrap liquidity and creates interest among crypto lenders. Instead of working in a vacuum with restricted growth hacking tools like yield farming, DeFi has to reach out to the real lenders and borrowers.
DeFi lending must evolve to cater to conventional borrowers
The contemporary breed of technologies dilute risk instead of delivering user accountability. Ryan adds that solutions providing continuous movement between DeFi and conventional monetary markets are the need of the hour.
Michael Anderson from Framework Ventures says that the traditional lending world relies heavily on credit scores. Instead of using uncertain trustless lending, interoperability within the current systems must be explored by tapping into the traditional credit scoring systems.
The Teller Protocol wishes to decrease the risks associated with lending in a crypto environment. It will help users to create decentralized lending marketplaces to provide unsecured crypto lending. Overall, it will help bring down the myths associated with DeFi lending and let traditional users crossover to the new decentralized world.