DeFi Lending Service Altitude Raises $6.1 Million to Enhance Capital Efficiency
In Brief
Altitude raised $6.1 million in financing to enhance capital efficiency by automating dormant funds in overcollateralized loans.
Decentralized finance (DeFi) lending service Altitude announced a close of seed round led by Tioga Capital, New Form Capital, Flow Ventures, UDHC, GSR, Owl Ventures, with participation from notable angel investors such as Marc Zeller of AAVE. The project had previously secured funding in a pre-seed round from a group of Web3 builders, bringing the total raised funding to $6.1 million.
Altitude enhances capital efficiency by automating dormant funds in overcollateralized loans to explore additional yield opportunities. The protocol automates collateralized debt management by adjusting the loan-to-value (LTV) ratio in real time, maximizing capital efficiency while ensuring a secure liquidation risk profile.
“Crypto lending is already a cornerstone of the DeFi sector, but its full potential remains untapped. Altitude’s novel approach will catalyze the next wave of growth by giving DeFi investors peace of mind while generating better yields.”
said Michiel Lescrauwaet managing director at Tioga Capital, commenting on the investment.
If the collateral’s value increases and Altitude identifies excess collateral in a loan, the protocol allocates it to various platforms for income generation. When the collateral is needed to secure the loan, the protocol automatically rebalances to maintain the targeted LTV.
Additionally, Altitude collaborates with major DeFi lending protocols and yield aggregators, optimizing users’ capital by continuously refinancing loans at the best rates, actively managing dormant capital for yield, and repurposing generated yield to reduce user debt, allowing gradual reduction even if users fail to repay.
“Having been in DeFi since before it was called that, I’ve always had to manage loan positions manually, which is not only time-consuming but also higher risk. We are building Altitude to automate what people do every day to ensure their capital is working as hard as it can.”
said Tobias van Amstel, co-founder of Altitude.
Altitude Innovative Approach to Lending
Blockchain technology has revolutionized lending mechanisms, enabling users to borrow funds without credit history, KYC verification, or registration in the DeFi landscape.
This shift has propelled lending to become the primary use case in DeFi, representing over one-third of the total value locked (TVL) in DeFi applications by the end of 2023. Despite this growth, DeFi lending faces challenges such as overcollateralization.
Without credit history and registration, borrowers often need to lock in more cryptocurrencies than the loan’s value as collateral. The LTV ratio, indicating how much one can borrow relative to the collateral, is often set at low levels to mitigate risks for lenders due to collateral price volatility. While this safeguards lenders, low LTVs result in substantial unused capital, contributing to high capital inefficiency in DeFi lending and borrowing markets.
Addressing this challenge, Altitude automates collateralized debt management by dynamically adjusting the LTV ratio. This approach enhances capital efficiency while upholding a secure liquidation risk profile.
Recently, Altitude has concluded on-chain testing and is set to enter a closed beta phase, accessible to whitelisted addresses, before proceeding to a full launch. With growing adoption, the company aims to extend its presence to other EVM-compliant Layer 1 and Layer 2 networks and establish integrations with prominent lending protocols and yield sources.
Altitude’s new investment propels its innovative DeFi lending service to automate collateralized debt management, maximizing capital efficiency. The platform’s novel approach garners attention, catalyzing the next phase of DeFi growth and aligning with the evolving digital landscape.
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About The Author
Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
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Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.
