Blockchain startup Codex has raised $15.8 million to construct a layer-2 community particularly for stablecoins, signaling that extra builders are speeding to capitalize on the rising business and regulatory alignment round fiat-backed secure belongings.
The seed spherical was led by Dragonfly Capital, with further participation from Coinbase, Circle, Cumberland Labs, Wintermute Ventures and others, Codex advised Fortune.
The funding might be used to assist Codex construct its stablecoin-only platform from the bottom up, stated co-founder and CEO Haonan Li.
Supply: Victor Yaw
Codex has disavowed “general-purpose blockchains” due to their inefficiencies in assembly real-world use circumstances, stated Li. As an alternative, Codex is constructing a stablecoin-only chain on prime of Optimism, an Ethereum layer-2 scaling resolution that makes use of rollup expertise to spice up transaction speeds and decrease prices.
Though particulars in regards to the Codex chain have been sparse, Li stated the stablecoin resolution goals to create a predictable charge construction that isn’t influenced by unstable blockchain exercise.
Codex can be aiming to construct stablecoin off-ramps with current cryptocurrency exchanges and native brokers, which might enable customers to money out their onchain belongings for fiat.
Associated: Stablecoin adoption grows with new US payments, Japan’s open method
The stablecoin “hunch”
In 2023, Li had a “hunch” that stablecoins could be the subsequent main blockchain progress story, which on the time “was a fairly contrarian view amongst these core crypto folks,” he advised Fortune.
Codex co-founder Victor Yaw stated the stablecoin market has grown 60 occasions within the final six years, however nonetheless solely accounts for lower than 2% of offshore US greenback deposits.
“We haven’t even scratched the floor,” he stated.
Stablecoin demand has proven indicators of resilience, rising within the face of hostile crypto market circumstances. Though crypto markets plunged within the first quarter, stablecoin provides elevated by $30 billion throughout that interval, in keeping with crypto intelligence agency IntoTheBlock.
The whole stablecoin market capitalization now sits at almost $230 billion. The overwhelming majority of secure belongings are backed by US {dollars}.
The stablecoin circulating provide has grown by almost 3% over the previous 30 days. Supply: RWA.xyz
Codex isn’t the one stablecoin community to emerge from stealth this 12 months. In January, a layer-1 community referred to as 1Money raised $20 million to additional develop its stablecoin fee platform.
1Money’s founder and former Binance.US chief Brian Shroder advised Cointelegraph that the way forward for stablecoins might be “multicurrency,” with secure belongings extending past the dominant US greenback.
Progress past the US greenback will probably be fueled by “demand for localized stablecoin monetary options and use circumstances,” stated Shroder.
Associated: ‘We’re bullish on stablecoins,’ next-gen DeFi — Coinbase Ventures head