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On June 7, Backd, a reactive liquidity decentralized finance (DeFi) protocol, announced the raise of $3.56 million in its latest funding round led by Advanced Blockchain AG. Notable investors included Spartan Group, Maven 11, Struck Crypto, Apollo Capital and Divergence Ventures. The raise represents a key milestone for the protocol in bringing reactive liquidity to DeFi.
Backd is maximizing the power of DeFi users’ assets by deploying reactive liquidity pools where users can increase the utility and efficiency of assets. This is possible with Backd’s core protocol architecture of yield-aggregating liquidity pools and actions, letting users earn compounded yield and autonomously delegate liquidity to external protocols when most efficient.
Reactive liquidity solves the problem of static- or single-utility liquidity pools common in DeFi today. Liquidity is static when it’s dedicated to serving one function at a time, meaning when users deposit assets into a protocol, they realize the opportunity cost of not having assets allocated elsewhere.
Backd’s reactive liquidity changes how DeFi users earn yields and execute DeFi transactions. By depositing funds into Backd pools and registering actions, users can always earn until the moment those funds are more efficient elsewhere.
On Backd, users first provide liquidity for pools to auto-compound earnings. Afterward, they register actions to their Backd liquidity-provider tokens to automatically delegate a portion to an external position when needed. Registering actions is optional: Users can choose to use Backd as a yield farm or make their liquidity reactive with registered actions.
On March 16, Backd’s first phase went live on the mainnet with the release of its yield-aggregating liquidity pools that currently supports deposits for Dai and USD Coin (USDC). From initial deployment until now, both have had an average APY of 11%.
The protocol has also undergone a phased launch with additional audits completed to secure the protocol. In the coming weeks, Backd will remove pool deposit caps and launch its first action: collateral top-ups to let DeFi users earn high yields while protecting their loans from liquidation. Backd collateral top-ups, or liquidation protection, will launch with support for Aave and Compound (COMP). Support for additional protocols will follow soon.
Backd’s design has no limit to the strategies and actions that can be implemented. Following the launch of its actions feature, Backd is releasing its long-awaited governance token, where tokenholders can propose and vote on strategies, new actions and general protocol updates.
Backd has a growing community that accepts contributions at any level. If one is interested in the future reactive liquidity, join the community on Discord.