Lava completed a $10 million Series A financing round in December, with investors including Khosla Ventures, one of the early investors in OpenAI.
Written by: KarenZ, Foresight News
After the turmoil in the crypto lending industry, marked by the collapse of giants like Genesis, BlockFi, and Celsius, an undeniable fact is gradually emerging: ensuring user safety through self-custody while providing efficient and convenient lending services has become the core proposition for the industry's development. Today, we introduce a financial application that supports Bitcoin lending, Lava.
By the end of 2024, Lava completed a $10 million Series A financing round, led by Founders Fund and Khosla Ventures. Founders Fund has been quite active in the crypto space, investing this year in popular projects such as Polymarket, the modular blockchain project Avail, the parent company of Pudgy Penguins, Igloo, the rollup-as-a-service platform Caldera, the Bitcoin rollup project Citrea, Solana infrastructure provider Helius, and the open-source AI platform Sentient.
Khosla Ventures, a private venture capital firm founded by billionaire venture capitalist Vinod Khosla, has gained fame for its early investments in companies like Impossible Foods, Instacart, Affirm, DoorDash, Square, and OpenAI. Although Khosla Ventures has not made significant investments in the crypto space since its investment in Sam Altman's Worldcoin project in 2022, its investment in Lava undoubtedly reaffirms its strong confidence in the company.
What is Lava?
Lava, a Bitcoin financial application with the slogan "Save in Bitcoin, Spend in Dollars," is dedicated to building an application for Bitcoin savings and dollar spending.
The founder of Lava is Shehzan Maredia, who serves as both CEO and CTO. Most of the introductory articles on the Lava website are also written by Shehzan Maredia. The Lava team is divided into two core groups: the Vault team, which focuses on building self-custody applications for Bitcoin and dollars, and the Application team, which is dedicated to developing various features needed to support self-custody applications.
Lava Vault, as Lava's flagship product, is designed for users who wish to save in Bitcoin and spend in dollars, such as Bitcoin holders, miners, traders, Bitcoin enthusiasts, immigrants, and users from developing countries.
Lava Vault is available on both iOS and Android and offers three main features: Lava Free Pay, Lava Exchange, and Lava Smart Key.
Among them, Lava Free Pay provides instant, free, and global payment services, allowing users to make payments on the blockchain without holding Gas tokens, greatly enhancing the experience for self-custody users. Currently, Lava supports USDC on the Solana blockchain and plans to integrate other chains in the future.
Lava Exchange provides users with a convenient channel for purchasing and withdrawing Bitcoin. It not only allows users to directly purchase assets into their self-custody accounts but also supports withdrawing funds to bank accounts. Essentially, Lava Exchange is a centralized exchange aggregator that can guide users to the optimal price trading paths. In the future, it will integrate more centralized exchanges and aggregate across decentralized exchanges to provide users with a unified exchange aggregator service.
After purchasing or depositing Bitcoin, users can use the Lava loan protocol to collateralize Bitcoin to borrow dollars, with Lava stating interest rates as low as 4%. Users can choose to repay the loan with appreciated Bitcoin (provided the price of Bitcoin has increased) after the loan matures and receive the remaining amount, or they can adjust the loan amount before maturity to suit their needs.
Subsequently, users can transfer the borrowed dollars directly from Lava Vault to their bank accounts. In the future, the Lava Card will also support users spending dollars directly from Lava Vault.
Lava Smart Key is the key to achieving secure self-custody for Lava. It does not require the use of a mnemonic phrase but supports the creation of a 2-of-2 backup mechanism. One half of the backup is associated with the Seed and is encrypted and stored in iCloud or Google Drive; the other half is linked to the encrypted key stored on a private key server, which can only be authenticated using a user-defined 4-digit Lava recovery PIN code. This backup mechanism not only significantly ensures the security of funds but also provides a convenient asset recovery pathway.
For businesses, Lava offers the opportunity to earn digital dollars through Bitcoin-backed loans. For developers, Lava supports the integration of various features such as Lava Free Pay, Lava Loans Protocol, Lava Exchange, and Lava Smart Key.
It is worth mentioning that, unlike many other crypto startups, Lava does not intend to launch its own token, and its Series A financing was conducted through full equity financing.
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