Blockchain startup Codex has raised $15.8 million to construct a layer-2 community particularly for stablecoins, signaling that extra builders are dashing to capitalize on the rising trade and regulatory alignment round fiat-backed secure belongings.
The seed spherical was led by Dragonfly Capital, with extra participation from Coinbase, Circle, Cumberland Labs, Wintermute Ventures and others, Codex informed Fortune.
The funding can be used to assist Codex construct its stablecoin-only platform from the bottom up, mentioned co-founder and CEO Haonan Li.
Supply: Victor Yaw
Codex has disavowed “general-purpose blockchains” due to their inefficiencies in assembly real-world use instances, mentioned Li. As an alternative, Codex is constructing a stablecoin-only chain on high of Optimism, an Ethereum layer-2 scaling answer that makes use of rollup expertise to spice up transaction speeds and decrease prices.
Though particulars in regards to the Codex chain have been sparse, Li mentioned the stablecoin answer goals to create a predictable price construction that isn’t influenced by unstable blockchain exercise.
Codex can also be aiming to construct stablecoin off-ramps with present cryptocurrency exchanges and native brokers, which might permit customers to money out their onchain belongings for fiat.
Associated: Stablecoin adoption grows with new US payments, Japan’s open method
The stablecoin “hunch”
In 2023, Li had a “hunch” that stablecoins can be the subsequent main blockchain development story, which on the time “was a fairly contrarian view amongst these core crypto individuals,” he informed Fortune.
Codex co-founder Victor Yaw mentioned the stablecoin market has grown 60 instances within the final six years, however nonetheless solely accounts for lower than 2% of offshore US greenback deposits.
“We haven’t even scratched the floor,” he mentioned.
Stablecoin demand has proven indicators of resilience, rising within the face of antagonistic crypto market situations. Though crypto markets plunged within the first quarter, stablecoin provides elevated by $30 billion throughout that interval, in response to crypto intelligence agency IntoTheBlock.
The entire stablecoin market capitalization now sits at practically $230 billion. The overwhelming majority of secure belongings are backed by US {dollars}.
The stablecoin circulating provide has grown by practically 3% over the previous 30 days. Supply: RWA.xyz
Codex isn’t the one stablecoin community to emerge from stealth this 12 months. In January, a layer-1 community known as 1Money raised $20 million to additional develop its stablecoin fee platform.
1Money’s founder and former Binance.US chief Brian Shroder informed Cointelegraph that the way forward for stablecoins can be “multicurrency,” with secure belongings extending past the dominant US greenback.
Development past the US greenback will probably be fueled by “demand for localized stablecoin monetary options and use instances,” mentioned Shroder.
Associated: ‘We’re bullish on stablecoins,’ next-gen DeFi — Coinbase Ventures head