If there is one lesson to be learned from the collapse of the UST stablecoin is that a number of the stablecoins that exist in the web3 world these days are tied to mostly unsustainable and highly risky assets. The world of decentralized finance (DeFi) intends to expand its reach, but in order to accomplish this goal, it requires alternative sources of yields.

Market decline

Founder of ZeFi, which is a startup in the decentralized finance (DeFi) ecosystem, Md Halim said that the last summer, lending protocols were offered yields between 4% and 6% on USDC. As a matter of fact, there even came a time when yields had climbed to as much as 9%.

When prices of Bitcoin and Ether began to rise, so did the demand for loans against these crypto assets and this resulted in lending protocols offering higher yields. However, the market conditions have changed now and now there is uncertainty and fear. There are lots of whales and large funds that have also suffered from losses.

This has had a cascading impact on lending protocols. Lenders have decided to liquidate the collateral they had in order to recover their loans, which resulted in a further decline in prices of the cryptocurrencies. It is the reason why there has been a decline in the TVL in various DeFi protocols.

MoHash working on a solution

The chief executive and founder of MoHash, Arun Devarajan said that this sends a clear message; every crypto enthusiast wants access to safer assets. The startup is trying to address this problem by tapping into the yields of the real world. They are developing a decentralized finance (DeFi) protocol that will allow alternative assets to tap global liquidity and capital.

The CEO said that they were trying to offer access to fast-growing economies, particularly those that do not depend on the crypto market for their growth. He said that while crypto is useful for trading, it is highly volatile. Therefore, they want to incorporate high-yield and regulated assets into the mix. The startup has assembled a team of experienced finance and tech individuals who have previously worked at Samsung, India Stack, Oliver Wyman, Amazon and Goldman Sachs.

Seed funding

The vision of the MoHash startup has already received some backing. The company announced on Thursday that they had managed to raise about $6 million in funding. Quona Capital and Sequoia Capital India led the funding round and some of the other participants included Jaynti Kanani and Sandeep Nailwal, the founders of Polygon, Balaji Srinivasan, CoinSwitch, Coinbase Ventures, Hashed Ventures, Jump Crypto and Ledger Prime.

Sequioa Capital’s managing director, Shailesh Lakhani said that MoHash was bringing real-world assets into the world of decentralized finance and would offer sustainable yields on-chain that are hard to access. He said that this is the product that decentralized finance needs, as it can leverage blockchain and can resolve some real-world problems. He added that they had enjoyed working with MoHash in the last few months.