Yala Raises $8 Million for Bitcoin-Backed Stablecoin

Yala, a crypto startup developing a bitcoin-backed stablecoin, has raised $8 million in a seed funding round co-led by Polychain Capital and Ethereal Ventures.

Investors

Other investors in the round included Galaxy Vision Hill, Anagram, ABCDE, Amber Group, HashKey Capital, Satoshi Lab, and UTXO Management, Yala said Thursday. This was an oversubscribed seed round, according to Yala co-founder and COO Kaitai Chang, who added that the firm initially aimed to raise $5 million.

Fundraising Details

Yala began raising capital for the seed round in March and closed it last month. The round was structured as a simple agreement for future equity (SAFE) with token warrants, but Chang declined to comment on Yala's valuation.

Founding Team

Founded in January this year, Yala's team includes Chang, a former Binance Labs employee; Bin Liu, co-founder of Alchemy Pay; and Vicky Fu, a former director of engineering at Circle. The trio aims to advance the development of decentralized finance on Bitcoin.

About Yala

Yala is developing a bitcoin-backed, yield-earning stablecoin called YU. Users will soon be able to mint YU by depositing bitcoin onto any destination blockchain through MetaMint, a cross-chain protocol allowing for instant conversion of native BTC into stablecoins on EVM-compatible chains. This simplifies the user experience by eliminating the need for intermediate wrapping.

Yala has reportedly secured over 2,000 BTC (worth about $126 million) in deposits for its protocol. Currently, Yala accepts BTC as collateral, with future plans to accept Bitcoin liquid staking tokens.

Insurance Feature

In addressing challenges such as Bitcoin's 10-minute block production time, Yala is adding an insurance feature to its protocol. The insurance module, Takaful, represents Yala's innovative approach to DeFi on Bitcoin, creating a cooperative framework where participants collectively manage risks and benefits. It includes 'qard hasan' loans (interest-free, based on Islamic ethics) as a fallback for insufficient funds.

Launch Schedule

The Yala protocol is currently under development, with the testnet expected to launch this month and the mainnet planned for the first quarter of next year. The governance token, YALA, is also expected to launch alongside the mainnet.

Currently, 23 people work remotely for Yala globally, with plans to expand the team across business development, engineering, and marketing functions.