Paradigm Labs Backed By Polychain Capital, Dragonfly Capital, And Chapter One Ventures Shuts Down
Paradigm Labs Backed By Polychain Capital, Dragonfly Capital, And Chapter One Ventures Shuts Down
March 12, 2020
Paradigm Labs Backed By Polychain Capital, Dragonfly Capital, And Chapter One Ventures Shuts Down
Paradigm Labs Backed By Polychain Capital, Dragonfly Capital, And Chapter One Ventures Shuts Down
March 12, 2020

Paradigm Labs, a decentralized finance project, backed by veteran crypto investors Polychain Capital, Dragonfly Capital, and Chapter One Ventures, is shutting down.

On March 10, it has been reported that Liam Kovatch, the CEO and Co-founder of Paradigm Labs, said that the closure was due to Paradigm’s “failure to carve a viable niche in the DEX [decentralized exchange] marketplace” and to factors, both “within and outside” of the team’s control.

As founded in 2018, Paradigm Labs raised an undisclosed amount in seed funding for the development of a product dubbed Kosu, a liquidity aggregation protocol for DEXs.

However, in the span of these past two years, Kovatch wrote that the DEX landscape has “evolved considerably,” with the result that many of Paradigm’s early efforts and investment in Kosu were “made obsolete” by changes in DEX market structure.

ALSO READ :  Reddit’s r/WallStreetBets Subreddit Spreads To The Crypto Space After A New Coin Appeared At The Top Of CoinMarketCap’s Rankings

Kovatch added:

“We’ve been able to observe significant developments such as the launch of Uniswap, the establishment of the decentralized finance (DeFi) movement and more. While exciting and positive for the community at large, these developments have made the DEX space incredibly fluid, and challenging for an organization like ours to navigate.”

Likewise, the CEO revealed that Paradigm Labs began to doubt Kosu’s viability in the rapidly changing DEX ecosystem by early to mid-2019, due not only to Uniswap’s popularity but also to early developments on the DEX protocol 0x (ZRX).

Amid an increasingly “crowded liquidity protocol/networking ecosystem,” Kovatch noted that the team designed a new product, a non-custodial request for quotation system dubbed Zaidan, built on 0x.

However, he added:

“Came to us late in the company’s life cycle at which point we were under-resourced to fully develop Zaidan […] were quite hesitant to pivot completely away from Kosu due to the investment we had made in the project. In retrospect, this hesitation was a mistake. ”

Overall, Kovatch attributes Paradigm Labs’ failure to being “a bit too early” an entrant into the DeFi space, and the project has now found itself unable to secure the necessary funding to develop Zaidan into a live trading system.

ALSO READ :  South African Authorities To Pay Closer Attention To The Crypto Space In 2021

It has been analyzed that DEXs or non-custodial, decentralized crypto exchanges, enable users to trade peer-to-peer, using smart contracts to automate deal matching and asset liquidation in order to allow users’ funds to remain under their control. Their sluggish adoption has to date broadly been attributed to their low liquidity rates relative to established centralized counterparts.

In the meantime, DeFi is used to designate the decentralized finance market, or the use of blockchain, digital assets and smart contracts for financial services such as credit and lending.

In early February, locked-up assets in the DeFi market, i.e. across its spectrum of smart contracts, protocols, and decentralized applications, hit a milestone $1 billion in value. This represented a fourfold increase year-on-year.

Later that month, the sector saw a setback, falling by $140 million from its peak of $1.2 billion on February 18.

Thus, this followed a series of back-to-back “flash loan” attacks on the decentralized lending protocol bZx.

Source: | | Image:


Crypto News Point a news platform of Digital Notice Media Labs is primarily a regular publication of information, commentary and articles focused extensively on fintech, blockchain technology, cryptocurrency, blockchain-based tokens, cryptocurrency market trends, and trading strategies. We do not provide individually tailored investment advice and does not take a subscriber’s or anyone’s circumstances into consideration when discussing investments, nor is Crypto News Point registered as an investment adviser or broker-dealer in any jurisdiction. Information contained herein is not an offer or solicitation to buy, hold, or sell any digital assets.

Affiliate Disclosure: To help support the work we do here at CNP, we often link to products and deals from around the web. Should you buy some of these, we may get a portion of the sale.

We in generally gather content from the major websites. In every article there is always a clear link and attribution to the source publication. If you have any issue with any of our published content taken from your site, kindly let us know so that we can take appropriate action. In any case, the content of the pages of this website is for your general information and use only. It is subject to change without notice.

You May Also like

AXA To Offer Its Customers Pay With Bitcoin

AXA To Offer Its Customers Pay With Bitcoin

AXA, Europe’s second-largest insurance firm, has planned to offer its customers the option to pay their bills with Bitcoin (BTC) through a collaboration with the established cryptocurrency broker Bitcoin Suisse. It has...

Ishita Bora

Ishita Bora is a Senior Content Creator at Digital Notice Media Labs with experience of 1.5 years. She has completed her Master's Degree in Language and Linguistics in 2019 from Gauhati University, India. Her interest lies in blockchain technology and cryptocurrency space. She loves writing about blockchain and other blockchain-related articles.