JellyFi Year in Review

Looking back on JellyFi's journey in 2021
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JellyFi Year in Review
  • EthGlobal MarketMake Hackathon – January-February
  • Creation of JellyFi – April
  • Aave Grants DAO recipient – June 
  • EthCC Paris – JellyFi presentation and release of Alpha on testnet – July 
  • “Les Amis d’Ethereum France” meetup & JellyFi presentation – December
  • Aave Grants DAO community call – December
  • JellyFi announces seed funding $4.4 million – December

2021 was an amazing year for JellyFi. So much has happened over the past few months and here is an introduction to the JellyFi platform and a look back at some highlights and milestones from this year.

Introducing Uncollateralized Loans and JellyFi

Uncollateralized lending is a hot topic in the DeFi space, as it  enables borrowers to access crypto loans without the need to post collateral upfront. JellyFi can benefit two types of users, lenders and borrowers. Liquidity providers  will be able to access higher returns than on over-collateralized lending protocols. Borrowers (including audited dApps, protocols and DAOs), will have access to a new stream of liquidity.

On the JellyFi platform, borrowers must pass a thorough vetting process before they will be accepted and whitelisted. Once on the JellyFi platform, borrowers can borrow as they please to meet their need for liquidity. 

The JellyFi platform will allow liquidity providers to choose their borrowers and lend their funds to audited and whitelisted dApps and protocols at their chosen lending rate. 

Early beginning: EthGlobal MarketMake Hackathon

How did this adventure get started? At the beginning of 2021, a team of colleagues participated in the EthGlobal MarketMake Hackathon, held from January 15th-February 7th. The hackathon was sponsored by Aave, the Ethereum Foundation, 1Inch, Chainlink and others, with a prestigious lineup of judges, speakers and mentors from across the industry, aiming to help participating teams deliver working products that can push the Web3 ecosystem forward.

Participants in the hackathon included over 500 developers from around the world, with more than 120 projects submitted. After weeks of close collaboration developing a project and presenting to the judges, this project was selected out of the 12 finalists and named the winner of the credit delegation track, thanks to its concept for a capital-efficient DeFi lending protocol.

As a result of the hackathon, an opportunity that could be addressed was identified: undercollateralized crypto loans for trusted borrowers. Today, most DeFi lending protocols require institutional borrowers to over-collateralize their loans using crypto as collateral. This limits the wide range of use cases possible with DeFi lending. Collateralized loans not only restrict borrowers from accessing capital how and when they need it, but also limit the potential for enhanced return for lenders.

The Creation of JellyFi

JellyFi was founded in April 2021 by a team of four co-founders who were previously colleagues at ConsenSys. They bring a combined background in blockchain software development, financial engineering, data science, and DeFi.

After going through the Aave Grants DAO process in June, a $70,000 grant was secured. The credit delegation feature from Aave V2 would be used to allow Aave users to delegate their collateral onto the JellyFi platform directly, and the last milestone that the team needed to reach in order to receive the full amount of the grant was to bring this feature onto mainnet. Sadly, this appeared to be much more complicated than the team anticipated. In this context, another direction was taken, i.e. using Aave as the default liquidity platform to deposit unborrowed liquidity, so that the JellyFi platform users will always at least get the Aave’s interest rate. This will allow the team to deliver the V1 of the protocol in time and work on the credit delegation feature for a next iteration of the protocol. This grant helped to solidify the project during the fundraising process and the JellyFi team is very thankful for this opportunity.

Why the name JellyFi? Jellyfish are transparent and so is the protocol. Transparency is one of JellyFi’s core values. Liquidity providers on the JellyFi platform will have transparency and can be aware of what they are doing – they can select who they lend to and choose their rates, in order to have more control over their investment portfolios. When brainstorming about the objectives of the protocol, the values of the team, and the innovation this will bring to DeFi, the name “JellyFi” seemed like a natural fit.

Presentation at EthCC 4 & Alpha Release

JellyFi - Founding Team at EthCC 4 & Alpha Release

In July, the JellyFi team secured a speaking slot at EthCC 4 in Paris and presented “Bringing Corporate Credit to DeFi with JellyFi.” The presentation highlighted the pain point in DeFi that JellyFi aims to address: over-collateralization. 

The smart contract architecture and risk framework were presented, followed by the roadmap, a short demo and a Q&A session at the end. As a bonus, the audience was able to take home some cool JellyFi swag.

Alpha Release 

JellyFi’s Alpha was released on Kovan testnet at EthCC. In the Alpha product, each borrower had their own pool. The lenders were able to choose their borrowers and deposit aDAI into their pools. The funds in the pool could then be used as collateral, so that the loan could take place on Aave’s protocol. The borrowing rate and the yield earned on top of Aave’s yield was derived in an algorithmic manner based on market supply and demand.

The Alpha enabled the collection of a lot of useful insights and feedback from test users. The JellyFi team would like to give a huge thank you to everyone who contributed! Only some features of the Alpha were kept for the V1, some features were discarded, and some will be saved for future versions of the platform.

Designing JellyFi V1

Thanks to the Alpha, the JellyFi team identified the features that needed to stay for the V1 and the features that had to change. For instance, the team was not satisfied with the rate discovery and came up with a new way for lenders to set their own rates. The JellyFi market engine will be the subject of an in-depth article in the coming weeks. 

Community Involvement and New Website 

In December, JellyFi participated in two community events. 

First, JellyFi co-hosted the Ethereum France community meetup “Les Amis d’Ethereum France,” on December 2nd with Sismo, in Paris. The event was kicked off with a presentation from Nathan Sexer of Ethereum France introducing the association and sharing the latest updates. Then the mic was handed over to Hadrien Charlanes and Loïc Vincent-Genod from Sismo, a zero-knowledge-based identity management solution over ENS. The event wrapped up with a presentation of JellyFi from Alexis Masseron, and attendees received their own event POAP souvenir to add to their NFT collection. 

On December 6th, Alexis was invited to speak at the Aave Grants DAO community call and provide feedback on the experience of being an Aave Grant recipient. Being involved in the hackathon definitely helped the team to get in touch with the right contacts for legal advice and assistance to then set up the entity. Participating in the hackathon was also a great first step to start meeting investors in order to try to raise funds, as being a grant recipient can be viewed as a stamp of approval by a highly regarded community in the DeFi ecosystem. 

JellyFi also launched a new website in December and the feedback has been extremely positive from the community. 

JellyFi Announces Seed Funding $4.4 Million

Earlier this month, JellyFi announced a seed funding round from leading crypto venture capital firms, led by Lemniscap, and joined by ParaFi Capital, Tioga Capital, White Star Capital, DeFiance Capital, True Ventures, Digital Currency Group, Genesis, Divergence Ventures, AngelDAO and several angel investors. The funds will be used to support JellyFi’s growth through R&D, key hires, and performing multiple audits. Read the full announcement here.

The JellyFi team is excited about what 2022 will bring! 

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