Obligate, a firm that provides blockchain-based regulated debt securities, recently made the announcement that they had extended their seed funding by $4 million. The company, which was originally known as FQX, will be able to scale its debt platform in preparation for its launch on the Polygon blockchain the following month with the assistance of the funding.
Along with the initial seed investors Earlybird and SIX Fintech Ventures, Blockchange Ventures and Circle Ventures took part in the extension. In late 2021, Obligate completed its first round of funding, bringing the total amount raised for its seed round to more than $8.5 million.
Streamlining the Debt Process in a Regulated DeFi Environment
Switzerland-based platform Obligate enables corporations to offer on-chain bonds and commercial paper – or debt securities that outline the terms of a loan – to get investment funds in a regulated decentralized finance (DeFi) ecosystem.
After the failure of the centralized cryptocurrency exchange FTX, venture capital firms and investors in traditional finance (TradFi) may adopt a more cautious approach to their investments, which could result in an increase in the use of other methods of fundraising.
Obligate co-founder and CEO Benedikt Schuppli said: “Obligate combines the benefits of DeFi with the trust and regulation of TradFi. Obligate is more efficient than many other bond platforms as we allow a direct issuance of blockchain-based bonds from the issuer to the wallet of the investors.”
A few clicks are required to complete Know Your Customer (KYC) verification process before issuers can create a bond program that meets their liquidity requirements. Schuppli noted that the liquid assets will be denominated in stablecoins such as USDC, but they will be easily convertible to U.S. dollars.
Investors will get accessibility to Obligate via its existing cryptocurrency wallet. The investor holds the relevant eNote (ERC-20 token) for each commitment, which bears the entitlement to receive payment at maturity as well as collateral in the event of default.
