Sublime Raises $2.5 mln To Make Credit Truly Accessible Via DeFi Loans

By Juan Fajardo Juan Fajardo has been verified by Muck Rack's editorial team
Published on October 20, 2021

Sublime has announced a raise of $2.5 million in seed funding to develop its digital reputation-based loan platform.

Important investors like Galaxy Digital, Electric Capital, FinTech Collective, Collab+Currency, Jill Carlson Gunter, and Ryan Selkis participated in the oversubscribed seed round. Avichal Garg, Partner at Electric Capital, referred to the firm’s participation by stating:

“We’re excited about how the open architecture allows myriad use cases – for instance, DAOs can raise debt by issuing pool-based bonds with different levels of seniority, or institutions can set up private credit lines amongst each other. Positions in pools which are tokenized into ERC-20 assets allow users to build structured debt products on top of Sublime.”

Sublime’s platform will take a different approach to traditional decentralized lending platforms by having their users stake their digital reputations instead of being limited to crypto assets. This is achieved by having users verify their identity using social media platforms like Twitter and Instagram, linking their identities to their on-chain activity, and reducing the need for crypto collateralization.

With this approach, Sublime expects to make loans accessible to users with no prior financial history while taking full advantage of the transparency and automation that blockchain provides. Ritik Dutta, Founder of Sublime, said about how the traditional approach to DeFi lending is lacking by saying:

“A trader’s on-chain history of yield farming or over-collateralized borrowing are poor indicators of their likelihood to return under-collateralized loans, making running any machine learning models over such data largely irrelevant.”

While the current DeFi market has seen increasing popularity over the past years, the current market has quickly become overcollateralized, which has made it inefficient for many people who could benefit from using it. Sublime will be launching its private alpha version next week, entering the crypto ecosystem at a time when DeFi is about to surpass the $100 billion in locked value threshold once again.

By Juan Fajardo Juan Fajardo has been verified by Muck Rack's editorial team

Juan Fajardo is a News Desk Editor at Grit Daily. He is a software developer, tech and blockchain enthusiast, and writer, areas in which he has contributed to several projects. A jack of all trades, he was born in Bogota, Colombia but currently lives in Argentina after having traveled extensively. Always with a new interest in mind and a passion for entrepreneurship, Juan is a news desk editor at Grit Daily where it covers everything related to the startup world.

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