Decentralized finance protocol Veda has raised $18 million to accelerate the adoption of its vault platform, which enables asset issuers to build crosschain yield products, including yield-bearing stablecoins.
The funding round was led by venture capital firm CoinFund, with additional participation from Coinbase Ventures, Animoca Ventures, BitGo, Mantle EcoFund, GSR, Relayer Capital, PEER VC, Draper Dragon, Credit Neutral, Neartcore and Maelstrom, the company disclosed Monday.
Veda’s angel investors include the co-founders of Anchorage, Ether.Fi and Polygon.
Launched in 2024, Veda is a protocol for tokenizing a wide range of DeFi applications, including liquid staking tokens, yield-bearing savings accounts and stablecoins. It underpins some of the largest vaults in the crypto space, powering platforms such as Ether.fi’s Liquid, Mantle’s cmETH and the Lombard DeFi Vault.
The total monetary value of assets locked on Veda has eclipsed $3.3 billion, according to industry data.
Veda has identified a growing demand for Bitcoin (BTC) yield generation, despite its challenges.
“Demand for dependable Bitcoin yield is high, but harvesting even a modest few-percent yield is often complex and time consuming,” Veda’s co-founder and CEO, Sun Raghupathi, told Cointelegraph.
Veda is addressing this challenge through its partnership with Lombard, the developer of the liquid-staked Bitcoin on Babylon.
Related: Kraken launches Bitcoin staking with Babylon integration
The growth of yield-bearing stablecoins
CoinFund’s investment in Vera partly reflects its growing conviction that stablecoin adoption is accelerating and bringing more wealth onchain.
“The natural next step for wealth onchain is to earn yield and to make your assets (fiat currency or digital assets) productive, David Pakman, CoinFund’s managing partner and head of venture investments, told Cointelegraph.
When asked about the rise of yield-bearing stablecoins, which have reportedly unsettled the traditional banking lobby, Pakman called them an “inevitability,” adding that they are “a much more convenient way of earning low-risk yield on fiat than traditional bank savings and money market accounts.”
“I do agree that, once we have more and more yield-bearing stablecoins, traditional bank savings accounts will be endangered and need to evolve,” he added.
Circle CEO Jeremy Allaire recently said widespread stablecoin adoption is approaching, predicting these assets will soon experience their “iPhone moment.”
Circle’s USDC (USDC) is the second-largest stablecoin, with more than $61 billion in circulation. Tether’s USDt (USDT) is the largest with a value of nearly $156 billion.
Related: GENIUS Act can make stablecoins ‘part of US financial infrastructure’