In summary
- 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 will use the funds to address key challenges in decentralized finance (DeFi), including liquidity fragmentation, scalability, and counterparty risks.
- Other notable investors include Ethereum core developer Consensys, trading firm GSR, and Cryptocurrency-native venture capital firm Moonrock Capital.
Yellow Network, a decentralized clearing network for digital assets, has closed a $10 million funding round led by Ripple co-founder Chris Larsen. The firm said it will use the funds to help address key challenges in decentralized finance (DeFi), including liquidity fragmentation, scalability, and counterparty risks.
Other notable investors include Ethereum core developer Consensys, trading firm GSR, and cryptocurrency-native venture capital firm Moonrock Capital.
Speaking to Decrypt, Larsen said that Yellow Network’s ability to offer fast trade execution and capital efficiency was a game-changer for high-speed trading firms.
“I’m proud to support Yellow Network as it tackles liquidity fragmentation in cryptocurrency trading and sets new standards for this evolving ecosystem,” he said. “Yellow Network’s decentralized clearing protocol is essential for new players entering the space, and its ability to offer fast trade execution and capital efficiency is a game-changer for high-speed trading firms.”
Institutional investors and other traditional firms have long complained about fragmentation in the crypto space as a barrier to entry. Having to move 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 primarily go towards research and development, with a focus on finalizing the open-source Yellow Network 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 critical to making decentralized trading more efficient, especially for cross-chain transactions.
“Nitro enables seamless interaction between different systems by integrating with Layer 1s, Layer 2s, custodian APIs, and private chains,” Louis Bellet, co-founder of Yellow Network told Decrypt.
Yellow Network’s decentralized settlement protocol is designed to address liquidity fragmentation and scalability, issues that have long plagued DeFi trading. The protocol uses state channel infrastructure and chain abstraction to facilitate high-speed trading with minimal counterparty risks.
“Yellow Network connects brokers and exchanges across multiple chains, creating a Blockchain-agnostic mesh network that aggregates liquidity and reduces slippage,” Bellet said.
He further said 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-up campaign will accompany the token launch, allowing users to participate in the expansion of the network by supporting brokers with the collateral needed to facilitate smoother transactions across multiple chains.
Edited by Stacy Elliott.
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