Ion Protocol Raises $4.8 Million

Ion Protocol, a liquidity protocol for staked and restaked assets, has raised an additional $4.8 million from investors including Gumi Capital Cryptos, Robot Ventures, BanklessVC, NGC Ventures, Finality Capital and SevenX Ventures, among others. This funding increases its total to $7 million.

Purpose of the Funding

The new capital will support the development of a native yield primitive called Nucleus, which aims to address monetization challenges for rollups and appchains and foster new decentralized application use cases.

“Through Nucleus, any network can provide its users with native yield for ETH, BTC, and USD-backed assets,” the team stated, offering financial incentives for user deposits. Users can generate returns on various assets by simply bridging into the network’s ecosystem.

Chunda McCain, co-founder of Nucleus, expressed, “Participating in the staking and restaking ecosystem to generate yield has become and will only become a more powerful economic incentive for every stakeholder in crypto.” He added that networks failing to maximize the value of bridged assets are missing out on potential revenue.

How Nucleus Works

With the rise of Ethereum rollup solutions offering cheaper and faster transactions, users often miss out on mainnet staking yields (around 3-4%). Bridged assets typically do not earn interest, creating a notable opportunity cost. Nucleus aims to provide default yield across over 20 different rollups and appchains in the upcoming months.

Nucleus sources yield by securing infrastructure products like bridges and oracle networks, redistributing this revenue to networks, applications, and users, with a focus on infrastructure-sourced yield to minimize risk. The yield is generated by lending capital through Ion Protocol’s lending platform and reallocating unused borrower liquidity to facilitate seamless liquidity movement across chains.