Ripple Co-Founder Chris Larsen Leads $10M Seed Round for Yellow Network's DeFi Protocol

Yellow Network aims to revolutionize decentralized finance with its blockchain-agnostic liquidity network and seamless cross-chain trading capabilities.

Yellow Network, a decentralized clearing network focused on improving digital asset trading, has raised $10 million in a seed funding round led by Ripple co-founder Chris Larsen. The funding round also included prominent investors like Ethereum developer Consensys, trading firm GSR, and crypto-native VC firm Moonrock Capital. The company plans to use these funds to tackle key challenges in decentralized finance (DeFi), including liquidity fragmentation, scalability, and counterparty risks.

In a statement about his investment, Chris Larsen highlighted Yellow Network’s innovative approach to solving liquidity fragmentation within crypto trading. "Yellow Network’s decentralized clearing protocol is essential for new players entering the space," said Larsen, adding that its potential to deliver faster trade execution and capital efficiency is a game-changer for high-speed trading firms.

Liquidity fragmentation, or the separation of liquidity across multiple blockchain networks, has been a longstanding barrier for both institutional investors and traditional financial firms looking to enter the DeFi space. Yellow Network aims to bridge this gap by creating a blockchain-agnostic mesh network, which connects brokers and exchanges across multiple chains, ultimately reducing slippage and improving liquidity aggregation.

Co-founder Louis Bellet outlined the key features of the protocol, which is designed to optimize high-frequency trading by leveraging the Nitro state channel framework. Nitro is a core component that enables near-zero latency and seamless interaction between different systems, including Layer 1s, Layer 2s, custodian APIs, and private chains. “This technology is crucial for making decentralized trading more efficient, particularly for cross-chain transactions,” Bellet said.

Part of the raised funds will be allocated to research and development efforts, primarily focusing on finalizing Yellow Network’s open-source protocol and further developing Nitro. The integration of the XRPL sidechain will also enhance Yellow Network’s ability to facilitate interoperability and liquidity, making it easier for institutional players to engage with decentralized ecosystems.

In line with its expansion, Yellow Network plans to launch its native token, $YELLOW, in Q4 2024. The token will play a central role in powering transactions, enabling capital efficiency, and supporting the ecosystem’s growth. A liquidity-locking campaign will coincide with the token launch, inviting users to support brokers with collateral for smoother trades across various chains.

photo source / Blockonome