Stani Kulechov, founder and CEO of Aave, said in a statement that ParaFi is the first institutional fund to make a direct investment in the protocol. Since launching in 2018, ParaFi has invested in MakerDAO, Compound and Kyber.
ParaFi, a Silicon Valley venture capital firm, yesterday announced it has invested $4.5 million in DeFi lending protocol Aave.
“We were initially drawn to the novelty of Aave’s Flash Loans, which solve for market inefficiencies across DeFi markets, and unlock new use cases,” said Santiago Roel Santos, partner at ParaFi.
Aave’s main offering is flash loans. Flash loans let you take out cryptocurrency, use it for a very specific purpose—say, a trade—then immediately return it back with interest.
Because there’s very little risk (theoretically, at least), flash loans don’t require any collateral. That means that you can get access to huge, life-changing loans with your lunch money.
