Teahouse Finance, a Taiwan-based decentralized asset management and strategy platform provider, has raised $5 million in a funding round spearheaded by AppWorks, one of Southeast Asia’s top VC firms and accelerators. Pantera Capital, NGC Ventures, Perpetual Protocol, and other investors also joined in on the round.
The startup, a Binance Labs graduate and first-place finisher in the TRON Global Accelerator competition, will use the new cash to create new products and business plans and increase the security of the asset management platform.
With the extra benefit that users can enter and exit weekly, Teahouse smart contracts handle customers’ funds on their behalf using dynamic algorithms, much like an investment portfolio.
To dynamically change the liquidity pool ranges and hedge positions to maximize trading fees earned while containing temporary loss, strategies use a variety of inputs, including market volatility.
In addition to providing liquidity, the company has introduced seven DeFi strategy vaults on various chains to simplify for people and companies to make investments and increase their profitability on Web3.
In January of this year, the company unveiled its first publicly accessible liquidity provision plan, which at the moment boasted an average APR of 54.37 percent and was initially confined to Teahouse NFT holders.
“With the recent collapse of trust in CEXes due to underhanded dealings by ex-industry-leaders like FTX, it is now more critical than ever to provide secure and transparent investment options that reside on-chain,” said Fenix Hsu, Teahouse co-founder and CEO.
Teahouse Finance focuses on solving concentrated liquidity provision
Teahouse Finance was established in 2021 to address the challenging “concentrated liquidity provision” issue.
Uniswap invented the Automated Market Maker (AMM) concept with the well-known x*y=k formula for DeFi to work, and in 2021 it further improved capital efficiency with the concentrated liquidity concept.
However, delivering liquidity on AMMs is still tricky and frequently unsuccessful.
“We continue to focus on solving the hardest challenges (such as concentrated liquidity provision), educating the community, and building an awesome ecosystem with our partners,” said Fenix Hsu.
Along with its primary goal of democratizing DeFi through initiatives like Perpetual Protocol and Chainlink, Teahouse Finance also plans to introduce its enterprise-ready B2B solution, Teahouse Private Vaults, in Q2.
These specialized vaults, which contain unique smart contracts for each investor, are run by Safe’s multi-sig wallets (previously Gnosis Safe), gated by NFTs, and secured by action filters that only permit certain transactions to be made (for instance, a strategy contract may change the allocation of funds but not withdraw money).
Teahouse Private Vaults are made for traditional companies trying to diversify into cryptocurrency and Web3 projects searching for a secure location to “HODL” or save their monies.
“Teahouse fills the market gap by providing asset management services in a fully decentralized way and allowing enterprise clients to optimize returns on DeFi products by better utilizing the liquidity. As the Web3 industry continues to grow, AppWorks will continue to support founders within our ecosystem,” said Jessica Liu, Partner at AppWorks.
