In December 2021, at the peak of the last DeFi cycle, a Paris-based team called Atlendis Labs closed a $4.4 million seed round to build something most lending protocols avoided: crypto loans without collateral. The round is a useful snapshot of what investors believed about on-chain credit at the time, and of how hard that market turned out to be.
The round at a glance
- Amount: $4.4 million seed round, announced on 8 December 2021.
- Lead investor: Lemniscap.
- Other investors: ParaFi Capital, Tioga Capital, White Star Capital, DeFiance Capital, True Ventures, Digital Currency Group, Genesis, Divergence Ventures, AngelDAO and several angel investors.
- Stated use of funds: research and development, key hires and multiple smart contract audits.
The problem Atlendis wanted to solve
The dominant DeFi lending markets work because every loan is overcollateralized. To borrow $100 in stablecoins, a user typically locks more than $100 worth of crypto. That makes lending safe for depositors, but it rules out most of the reasons businesses borrow in the first place: working capital, short-term liquidity, financing growth.
Atlendis proposed a different model aimed at institutions such as dApps, protocols and DAOs. Borrowers would go through a vetting process and, once whitelisted, receive their own dedicated liquidity pool. They could then borrow without locking collateral, repaying principal and interest at maturity. Lenders would decide which borrowers they trusted and at what rate they were willing to lend, instead of being exposed to a shared pool.
Why investors were interested
The investor commentary at the time framed overcollateralization as the main bottleneck holding DeFi back from real credit markets. Tioga Capital went furthest, suggesting that unsecured on-chain lending could grow from roughly $1 billion in total value locked to $100 billion within five years. Lemniscap described Atlendis as part of a new generation of protocols bringing corporate-style credit to DAOs and their on-chain treasuries.
The team was not starting from zero. Founded in 2021 by former ConsenSys employees and previously known as JellyFi, it had won the credit delegation track of the ETHGlobal MarketMake hackathon earlier that year.
What happened next
- March 2022: the V1 whitepaper was published, a credit evaluation partnership with Credora (then X-Margin) was announced, and the team received a grant from the Polygon Ecosystem DAO.
- June 2022: Atlendis V1 launched on Polygon mainnet with its first institutional borrowers.
- July 2022: market maker Wintermute opened a borrower pool with an initial 10 million USDC credit limit.
- May 2023: Atlendis V2 launched, shifting focus toward real-world businesses, with payments company Banxa as the first borrower.
According to DefiLlama, the protocol’s total value locked peaked at about $1.95 million in March 2023 and declined steadily afterwards, to roughly $16,000 by October 2026. The protocol’s own blog stopped publishing in spring 2024.
The takeaway
The Atlendis seed round captured a thesis that still drives on-chain credit today: DeFi cannot become a full financial system while every loan requires more collateral than it lends. The hard part was never the smart contracts. It was finding enough creditworthy borrowers, and enough lenders willing to price their risk, in a market that went through the 2022 crash only months after the round closed.
Sources
- DefiLlama: Atlendis protocol page
- White Star Capital portfolio: Atlendis
- CryptoSlate: Atlendis Labs announces the launch of the Atlendis Protocol V1 (press release, 7 June 2022)
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