Teahouse Finance, a decentralized asset management and strategy platform provider, announces a total raise of $5 million in funding, most recently with the close of a $2 million financing round led by AppWorks, one of the leading VC firms and accelerator in Southeast Asia. The raise also saw participation from Pantera Capital, NGC Ventures, Perpetual Protocol, and more.
“With the recent collapse of trust in CEXes due to underhanded dealings by ex-industry-leaders like FTX, it is now more critical than ever to provide secure and transparent investment options that reside on-chain”
Founded in 2021, Teahouse Finance was started to solve the difficult “concentrated liquidity provision” problem. In order for DeFi to function, Uniswap pioneered the Automated Market Maker (AMM) concept with the famous x*y=k formula in 2018, and further increased capital efficiency with the concentrated liquidity concept in 2021. However, even now, providing liquidity on AMMs remains a challenge, and often proves to be unprofitable.
Employing dynamic algorithms, Teahouse smart contracts manage users’ funds on their behalf, similar to an investment portfolio with the added benefit that users can enter/exit on a weekly basis. Strategies take various inputs including market volatility to dynamically adjust the liquidity pool ranges and hedge positions to maximize trading fees made while keeping impermanent loss contained. Not limited to liquidity provision, the company has launched a total of seven DeFi strategy vaults across multiple chains to help individuals and organizations to easily invest and become more profitable on Web3. Initially restricted to Teahouse NFT holders, in January of this year, the company released its first publicly available liquidity provision strategy, which currently boasts an average APR of 54.37%.