UNION, a decentralised finance protocol (DeFi) that develops risk management tools, has just raised 3.9 million dollars. Still very young, the DeFi sector, and more specifically its protocols, are often subject to security loopholes, which UNION is seeking to remedy.
The UNION protocol raises 3.9 million dollars to reduce the risks inherent to DeFi
UNION, the platform to secure DeFi
The financing round was led by Alameda Research, Ethereum Code review the company that operates the FTX exchange. Bering Waters Ventures, Spark Digital Capital, AAM, Solidity Ventures, 3 Commas, Cluster Capital, Rarestone Capital, Alpha Chain, Black Edge Capital also participated in this round.
It will certainly not have escaped you, the entire decentralised finance sector is not yet completely secure. Quite often, it happens that a protocol is attacked by hackers, or more subtly, that the code of its smart contract contains errors.
This is where UNION comes in, the platform offering risk management tools for DeFi applications.
For John Liu, product manager at UNION, the findings are indisputable. DeFi is still in a growth phase, and it would be hypocritical for anyone to claim that they „know all the risks“ of DeFi. He shares The Block with the media:
„We see clear blocks of risks, and the ones that we have prioritised are the transaction finality (things end up where they should be), the smart contract risk (specific to the project or the dApp), the layer 1 risk (failure of the whole protocol), the permanent loss (specific to liquidity providers), the collateralisation risk (specific to lenders). »
UNION thus poses itself as a protector of the users of its protocols, helping those who build DeFi applications to provide completely secure solutions.
👉 Further information – DeFi: Harvest Finance attacked for $24M, FARM loses 67%.
A crucial element for the maturation of the sector
With these funds, UNION is able to deploy its first range of security products. This range includes, among others, a transaction gas guarantee, protection of collateralisation ratios and coverage of smart contracts.
In the near future, UNION plans to promote the creation of a common protection that considers multiple layers of DeFi, layer 1 with Ethereum (ETH) and layer 2 with Matic Network for example.
UNION also plans to create secondary markets and to implement an inclusive model without KYC in order to remove barriers to access to risk management tools.
„We believe that with these products, buyers and developers can offload their risk, which is crucial for the maturation of DeFi,“ Liu told The Block.
With the DeFi sector worth nearly $13 billion at the time of writing, many people are starting to take an interest in it. It is in this context that new protocols are being deployed at a staggering rate.
Some of these protocols are accompanied by security holes that can cause the loss of user funds. Security is therefore unequivocally the most important component of a protocol, well ahead of the returns it can bring, and UNION could establish itself as a reference.