Yellow Network, a blockchain-based clearing network for crypto assets, has secured $10 million in seed funding. The round was led by Ripple co-founder Chris Larsen. Moreover, it included significant contributions from notable investors such as Ethereum developer Consensys, trading firm GSR, and Moonrock Capital, a crypto-native venture capital firm.
Ripple’s Chris Larsen Backs Yellow Network
The funds raised will primarily be used to address challenges within decentralized finance (DeFi) trading, such as liquidity fragmentation, scalability, and counterparty risks. Yellow Network’s open-source decentralized clearing network is designed to tackle these issues. They do so by offering solutions for liquidity aggregation across different blockchains.
Ripple’s Larsen highlighted the network’s potential, stating:
“Yellow Network’s decentralized clearing protocol is essential for the new players entering the space, and its ability to deliver fast trade execution and capital efficiency is a game-changer for high-speed trading firms.”
Moreover, the Ripple co-founder emphasized the critical role that Yellow Network will play in overcoming liquidity fragmentation, which has been a persistent challenge in crypto markets. Furthermore, Louis Bellet, co-founder of Yellow Network, explained the technical aspects of their solution.
“Yellow Network connects brokers and exchanges across multiple chains, creating a blockchain-agnostic mesh network that aggregates liquidity and lowers slippage,” Bellet noted, according to a Decrypt report.
Thus, with the integration of a variety of blockchains, Yellow Network aims to ensure seamless trading across decentralized ecosystems. This will reduce the complications that arise from having to move liquidity between networks.
One of the core elements of Yellow Network’s approach is its Nitro state channel framework, which is currently under development. For further context, Nitro is designed to provide near-zero latency for high-frequency trading and institutional trading, a critical feature in decentralized trading where speed and efficiency are paramount.
The newly secured funding will primarily be allocated to research and development. Additionally, this allocation will offer a strong focus on finalizing Yellow Network’s open-source protocol and further refining the Nitro framework.
Yellow Network founder noted, “Nitro enables seamless interaction across different systems by integrating with Layer 1s, Layer 2s, custodian APIs, and private chains.”
Native Token Launch
In addition to advancing its protocol, Yellow Network plans to launch its native token, YELLOW, in the fourth quarter of 2024. The token will play a vital role in the network, facilitating transactions and enhancing capital efficiency.
Moreover, the launch will coincide with a liquidity-locking campaign aimed at allowing users to support brokers by providing the necessary collateral to smooth trades across different blockchains. Hence, this initiative is expected to further enhance liquidity across the network and reduce counterparty risks for participants.
Furthermore, the integration of the XRP Ledger (XRPL) sidechain into Yellow Network’s protocol will enhance interoperability and liquidity for institutional investors. This will allow traditional institutions to safely engage in digital asset trading within decentralized ecosystems.
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