Yellow Network, a decentralized clearing network for digital assets, has closed a $10 million funding round led by Ripple co-founder Chris Larsen. The company said it will use the fund to help it address key challenges in decentralized finance (DeFi) trading, including liquidity fragmentation, scalability, and counterparty risk.
Other notable investors include leading Ethereum developer Consensys, trading firm GSR, and crypto-native venture capital firm Moonrock Capital.
Talk with DecryptLarsen said Yellow Network’s ability to deliver fast trade execution and capital efficiency has been a game-changer for high-speed trading firms.
“I am proud to support Yellow Network in its fight against liquidity fragmentation in crypto trading and in setting new standards for this evolving ecosystem,” he said. “Yellow Network’s decentralized clearing protocol is critical for new players entering the space, and its ability to deliver fast trade execution and capital efficiency is a game changer for high-speed trading firms.”
Institutional investors and other traditional businesses have long complained about the fragmentation of the cryptocurrency market, which is a barrier to entry. Moving liquidity from one network to another adds additional layers of complexity to cryptocurrency trading, one of the problems Yellow Network seeks to solve.
The funds raised will be primarily dedicated to research and development, with a focus on finalizing the Yellow Network open-source protocol and advancing the Nitro State Channel framework. Nitro will be a key component designed to enable near-zero latency in high-frequency and institutional trading. This technology is essential to making decentralized trading more efficient, especially for cross-chain transactions.
“Nitro enables seamless interaction between different systems by integrating with Layer 1, Layer 2, custodian APIs, and private chains,” said Louis Bellet, co-founder of Yellow Network. Decrypt.
Yellow Network’s decentralized clearing protocol is designed to address liquidity fragmentation and scalability issues that have long plagued DeFi trading. The protocol leverages state channel infrastructure and on-chain abstraction to facilitate high-speed trading with minimal counterparty risk.
“Yellow Network connects brokers and exchanges across multiple chains, creating a blockchain-agnostic mesh network that aggregates liquidity and reduces slippage,” Bellet said.
He added that by integrating the XRPL sidechain, Yellow Network improves interoperability and liquidity, making it easier for traditional institutions to securely trade digital assets within decentralized ecosystems.
Additionally, as part of its broader growth strategy, Yellow Network is preparing for the launch of the $YELLOW token, scheduled for Q4 2024, which will play a central role in powering transactions and improving capital efficiency within the ecosystem.
A liquidity lock campaign will accompany the token launch, so users can participate in the network’s expansion by supporting brokers with the collateral needed to facilitate smoother cross-chain transactions.
Edited by Stacy Elliott.
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