New fund aims to put hundreds of millions toward Algorand DeFi growth

Decentralized finance, or DeFi, has developed significantly over the past two years. The Algorand Foundation has unveiled a new fund positioned to allocate money toward certain DeFi projects looking to build on its native blockchain. 

The pool of capital is called the Viridis DeFi fund and is headed up by the Algorand Foundation — a group that was responsible for the Algorand blockchain and its ecosystem development. “This fund will provide 150 Million Algo to fuel the significant early growth of the DeFi ecosystem on Algorand,” according to a Friday post on the Algorand Foundation’s website.

“The fund will fuel the growth of decentralized exchanges, money markets, options markets, synthetic asset applications, and NFT platforms, all running on the best blockchain network for the future of finance,” the statement continued. 

At the time of publication, Algorand’s native coin (ALGO) trades at $1.96, based on CoinMarketCap data. This currently puts the value of the fund at $294 million, given the mentioned 150 million ALGO.

As the Ethereum blockchain has struggled to scale and meet DeFi usage demand — as isevident in the network’s high fees — other blockchains have increasingly gained traction.

Kicking off the fund, the Algorand Foundation revealed the first two Algorand DeFi building categories positioned to receive capital from the fund. Calling them “SupaGrants,” each grant holds $5 million. “We are excited to share the first two SupaGrants that have been designed to support the creation of critical DeFi infrastructure,” the announcement post detailed. “Introducing the $5 Million Price Oracle SupaGrant and the $5 Million Bridge SupaGrant.”

Oracles in the crypto space are essentially ways to route information data to certain blockchains from sources outside those networks. Bridges help to connect siloed blockchains so they can interact with each other, adding potential to possibly limited single networks. The oracle grant is open to interested applicants, while the bridge grant is still in the works.