UNION, a decentralized finance protocol (DeFi) that develops risk management tools, has just raised $ 3.9 million. Still very young, the DeFi sector and more specifically its protocols, are often subject to security loopholes, which UNION seeks to fill.
UNION, the platform to secure DeFi
The funding round was led by Alameda Research , the company that operates the FTX exchange . Bering Waters Ventures, Spark Digital Capital, AAM, Solidity Ventures, 3 Commas, Cluster Capital, Rarestone Capital, Alpha Chain, Black Edge Capital also participated in this fundraising.
You will certainly not have missed it, the entire decentralized finance sector is not yet completely secure . Quite frequently, it happens that a protocol is attacked by hackers , or more subtly, that the code of its smart contract contains errors .
This is where UNION comes in, the platform offering risk management tools for DeFi applications .
For John Liu , product manager at UNION, the finding is clear. DeFi is still in a growth phase, and it would be hypocritical for anyone to claim that they „know all the risks“ of DeFi. He shares with The Block media :
„We see clear blocks of risks, and those that we have prioritized are the finality of the transaction (things end up where they should be), the risk of the smart contract (specific to the project or to the dApp), the risk of Layer 1 (entire protocol failure), permanent loss (specific to liquidity providers), collateralization risk (specific to lenders). “
UNION thus acts as the protector of the users of its protocols, by helping those who build DeFi applications to provide completely secure solutions.
A crucial element for the maturation of the sector
With these funds, UNION is able to deploy its first range of security products. This range includes, among other things, a guarantee of transaction gas , protection of collateralisation ratios and coverage of smart contracts .
In the near future, UNION plans to promote the creation of a common protection that considers multiple layers of DeFi, layer 1 with Ethereum (ETH) and layer 2 with Matic Network for example.
UNION also plans to create secondary markets and implement an inclusive model without KYC to remove barriers to accessing risk management tools.
“We believe that with these products buyers and developers can offload their risk, which is crucial for DeFi to mature,” Liu told The Block.
With the DeFi sector weighing nearly $ 13 billion at the time of this writing , many people are starting to take an interest in it. It is in this context that new protocols are being deployed at a breathtaking pace.
Some of these protocols come with security holes that can cause the loss of their users‘ funds. Safety is therefore unequivocally the most important component of a protocol , well ahead of the returns it can bring, and UNION could establish itself as a benchmark.