Root Protocol based on the hacked Beanstalk service raised $9 million

Root Protocol, a marketplace project for financial markets, forecasting and trading, raised in a seed round$9 million

It was attended by Road Capital, Nima Capital, Soma Capital, Manifest Crypto and other investors.

Root is being created on top of the Beanstalk stablecoin protocol, which lost about $181 million in April as a result of a control system hack.

«Obviously this is a very unfortunatesituation. “I believe there are still many lessons to be learned regarding on-chain governance, which is still far from what it should be,” Root founder Parth Patel noted in a comment for The Block.

Beanstalk releases «stable coin» Bean secured by credit. Investors purchase the protocol's debt obligations, which earn interest.

The Root team is looking to expand the use of the coin with new markets like interest rate swaps for yield or betting platforms.

The project will mainly use the raised funds for direct investment in Beanstalk and audit of its own protocol. 

The Bean issuer plans to restart on August 6th. Root developers expect to present their product in October.

According to Patel, as «based onstablecoin loans, Bean is not intended to be hard-pegged to the dollar. In his opinion, in this case it is better to abandon the term «stablecoin».

“I think I would call the coin a non-convertible token with low volatility - algorithmic stablecoin has become a trigger word these days, and I don’t blame people,” Patel said.

Terra's Death Spiral: How and Why LUNA and UST Failed

Recall that in the second quarter, the volume of venture financing in the industry amounted to $6.76 billion, having collapsed by 31% compared to January-March.

Experts found an explanation for this in the collapse of Terra, the serious problems of Celsius and Babel Finance, as well as the waves of staff reductions of Coinbase, Gemini and Crypto.com.

Read ForkLog bitcoin news in our Telegram - cryptocurrency news, courses and analytics.