Decentralized Finance Sector Soars, August Raises $10 Million to Make DeFi Accessible to Institutional Investors
The decentralized finance sector is experiencing exponential growth, and August, a crypto-focused prime brokerage firm, has just secured $10 million in Series A funding from investors like Dragonfly Ventures. As a middleman of sorts, August aims to connect institutional clients with the most suitable DeFi networks for their investment strategies.
August's Vision: Simplifying Access to Decentralized Finance
With a focus on lending, borrowing, and trading, August provides large financial institutions and family offices with the capabilities they need to navigate the complex world of decentralized finance. The company has built relationships with 70 DeFi protocols and 13 blockchains, creating a vast network for institutional investors.
Aya Kantorovich, co-CEO of August, emphasized that her firm's primary goal is to provide a streamlined experience for clients seeking access to various DeFi platforms. While traditional banks act as intermediaries between buyers and sellers, August removes the confusion associated with choosing among different protocols or blockchains, enabling institutions to simplify their operations through its centralized platform.
The Importance of Decentralized Finance
Decentralized finance encompasses a diverse array of innovations such as prediction markets (e.g., Polymarket), non-fungible tokens like digital trading cards featuring former U.S. President Donald Trump's likeness, and stablecoins designed to track the value of fiat currencies (e.g., USD). By eliminating the requirement for traditional intermediaries, DeFi empowers users to complete financial transactions independently.
August's Revenue Streams
The company generates revenue from two primary sources: trading spreads, which are profits made by leveraging price differentials between tokens sold and purchased, as well as fees charged on each transaction conducted through its platform. The extent of August's annual revenue remains undisclosed; however, it has been growing steadily due to expanding client base.
Competition in the Prime Brokerage Market
August faces competition from other prominent prime brokerages catering to institutional clients. Coinbase's division, Coinbase Prime, and FalconX operate in this space as well, but August believes its ability to provide a single interface connecting institutional investors with various DeFi platforms will establish it as the go-to player among potential clients.
Upcoming Plans
Using the capital from the latest fundraising round, August intends to accelerate development of new technologies that can help institutional clients handle complex DeFi transactions more efficiently. Moreover, the company plans to expand its marketing efforts and strengthen its workforce with top talent to solidify its competitive position within the decentralized finance sector. The $10 million contribution is crucial in driving forward August's ambition to offer a user-friendly experience for accessing DeFi networks.
A New Era for Institutional Investing in Decentralized Finance
As more prime brokerages establish themselves in this growing field, investors can rest assured that options are increasing, and the road leading to mainstream adoption of decentralized finance appears smoother than ever.