APWine raises $2.6 million as it builds a modular interest market in DeFi

Parisian startup APWine has raised $2.6 million in a seed extension round that will see further development of its yield derivative products as well as an expansion of the team size.

The brainchild of a team of engineers from the Swiss Institute of Technology of Lausanne, APWine is a derivatives layer that offers a suite of tools and derivatives on DeFi yield-generating assets, essentially allowing stakeholders of DeFi protocols to speculate on the variability of their interest rates as well as leverage these derivatives to hedge or further optimise their methods.

The round is led by Berlin-based Greenfield Capital, and builds upon APWine’s previous $1 million seed round that was led by Delphi Ventures and saw the participation of The Spartan Group, DeFi Alliance, Rarestone Capital, and angel investors including Stake Capital Group founder and CEO Julien Bouteloup and Marc Zeller from open source and non-custodial liquidity protocol Aave.

As a composable low-level yield tokenisation primitive for DeFi, when building APWine founders Gaspard Peduzzi, Ulysse Ramage, and Jean Chambras are not limiting the options to a single narrow use-case, but rather giving builders with a wide birth, offering the flexibility to build various yield-focused applications, a factor particularly useful and not possible in TradFi.

So what does this really mean? On the structural layer, side pools can be created for any yield-bearing asset. This enables anyone to create yield derivatives based on underlying tokens. The protocol generates custom vaults associated with those pools to efficiently manage and incentivise the deployment of liquidity for those instruments. Liquidity providers for these vaults then generate additional yield on top of their current strategies through the collection of trading fees.

The startup counts Bancor, Tokemak, Aave, Visor, and Harvest Finance amongst its list of partners.

“We are reaching a state of maturity in the market that enables complex protocols like APWine to thrive,” explained Ramage. “Yield farming is a traditional finance practice that has been rendered mainstream through DeFi. We believe the set of derivative tools that we are building for the yield market vastly increases the quality and diversity of strategies in DeFi, and we are working hard to make these new composable primitives appealing to retail consumers and institutions alike.”

According to DeFi Pulse, the total value of assets locked in the DeFi ecosystem in May 2020 reached $56 billion, however with recent events, that number has dropped to $44.97 billion.

“We are passionate about APWine as it created a composable low-level yield tokenization primitive for DeFi. Building it as a primitive and not as a single narrow use-case provides builders with flexibility to build various yield-focused applications, including those which are not possible in TradFi, a goal which we are fully behind,” commented Greenfield’s Gleb Dudka. “Given the size and how closely tied the notion of yield is to DeFi, we are looking forward to seeing future use cases and integrations with APWine. Assuming even minor spill-over effects of traditional finance into DeFi, one can expect the market for such yield derivative products to reach hundreds of billions in value (0.01% of the global yield derivative market).”