Peter Thiel-backed Founders Fund leads a $5 million token buy in crypto collateral protocol Anvil

Peter Thiel-backed Founders Fund leads a $5 million token buy in crypto collateral protocol Anvil

Pantera Capital and Bullish also participated in the ANVL purchase as Anvil rolls out software designed to make its collateral protocol easier for businesses to integrate.

Founders Fund led a $5 million purchase of Anvil governance tokens, with participation from Pantera Capital, Theta Blockchain Ventures, Bullish and Protoscale Capital. Anvil launched a software development kit intended to help businesses and financial institutions integrate its digital-asset collateral technology without writing blockchain code. Unlike conventional decentralized finance lenders, Anvil uses collateral to guarantee financial commitments without requiring the provider to take out a loan or pay interest.

Founders Fund has led a $5 million purchase of governance tokens in Anvil, a decentralized finance protocol focused on digital-asset collateral, as the project rolls out new tools aimed at bringing its technology to businesses and financial institutions.

Pantera Capital, Theta Blockchain Ventures, Bullish and Protoscale Capital also participated in the purchase of ANVL tokens, according to a Monday announcement. The terms and valuation of the transaction were not disclosed. Anvil told CoinDesk the tokens came from its existing treasury rather than being newly issued.

The protocol's governance token has a circulating supply of 80 billion tokens out of a total supply of 100 billion.

Anvil, built on Ethereum, is designed to allow digital assets to be used as collateral for financial commitments, including payments and credit. Anvil Research Labs, a research and development company building enterprise tools for the protocol, also launched a software development kit (SDK) that it said will allow companies to integrate Anvil without having to write blockchain code.

“Businesses need to know the commitments behind payments and credit will be honored,” Joey Krug, a partner at Founders Fund, said in the announcement. “Anvil lets them secure those commitments with verifiable digital asset collateral, and the new SDK makes it easier to integrate into their products.”

Anvil Research Labs named Consensus, Bitcoin.com, payments company Flexa and several other companies as partners that are already using or integrating its tooling. Bullish (BLSH), the parent company of CoinDesk, is also working with Anvil to explore how the protocol could be used in its operations.

The ANVL tokens purchased by Founders Fund and the other investors provide governance rights over the protocol, allowing holders to participate in decisions about its development.

A different use for crypto collateral

Anvil is entering a part of decentralized finance where putting crypto up as collateral is already commonplace. DeFi lending protocols currently hold about $56 billion of assets, according to DefiLlama, with Aave and Morpho among the largest platforms.

The protocol, developed by the Acronym Foundation, was bootstrapped and made fully open source. It currently has about $14 million in total value locked on its network, and remains small compared with established DeFi lending platforms

But Anvil is aiming to put crypto collateral to a different use. Conventional DeFi lenders generally allow users to deposit assets as collateral and borrow against them, paying interest and potentially facing liquidation if the value of their collateral falls.

Anvil instead uses collateral to guarantee a financial commitment without necessarily creating a loan. Its core product is an onchain version of a letter of credit: assets are reserved to guarantee payment to another party and can be claimed if the commitment isn't met, according to a CoinDesk Research report. The arrangement doesn't require the collateral provider to borrow money or pay interest simply to create the guarantee.

Read more: Anvil: The Missing Collateral Layer

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