DeFi Trading Platform Raises Round Led by Alan Howard in Social Investing Push
Investors in decentralized finance platform Nested, including CMT Digital and Kenetic Capital, also participated in the Series A round
Blockworks exclusive art by axel rangel
key takeaways
- Nested allows user to mint an NFT that replicates their investment portfolios
- Trades are tracked via smart contracts that update the digital collectible, eliminating the need to mint a fresh NFT with each transaction
A DeFi platform, with a social investing twist that allows users to showcase their investment strategies via NFTs, has raised a $7.5 million round led by billionaire Alan Howard.
Nested Finance intends to use the Series A round to hire staffers, expand to additional blockchains and ramp up its staking capabilities, founder Rudy Kadoch told Blockworks.
Aside from Howard, investors including CMT Digital, Kenetic Capital and Republic Capital also participated in the round.
The startup allows users to mint an NFT (non-fungible token) on a supported blockchain of their choice that uses smart contracts to exhibit their DeFi (decentralized finance) trades on Nested’s platform. Traders — the majority are retail investors — are responsible for covering the costs of minting the NFT.
Supported blockchains now include Avalanche, Binance Smart Chain — now known as BNB Chain — and Polygon.
“Even if you are not a famous person on Twitter, you can create a reputation on Nested,” Kadoch said.
Once minted, the NFT is updated via smart contract to display new trades in real-time, eliminating the need to mint a fresh digital collectible as a trader’s portfolio shifts over time. Users do not connect their Nested portfolio to a centralized crypto exchange; liquidity is provided from the decentralized exchange 0x.
Nested, which allows users to replicate another trader’s portfolio, is betting on surging interest in crowdsourced alpha driven by social media success stories. The idea, Kadoch said, is to bring a clean, streamlined interface to the messy world of DeFi to cut through the crypto noise.
The startup’s founder likened the company to the early days of Coinbase, when the exchange brought crypto trading to the masses.
“Ten years ago, you were able to buy cryptocurrencies, but when Coinbase came, their plan was to democratize cryptocurrencies through a beautiful UX and succeeded with that,” he said.
“This is exactly what we want to do with Nested: Democratize DeFi through simplicity.”
Nested makes money by charging a nominal fee on each new NFT. When users create an account, they have the option of copying an existing NFT on the marketplace — replicating its trades in the process — or starting from scratch. Traders receive a royalty payout each time their portfolio is copied.
Kadoch said the thousands of DeFi coins trading creates a bottleneck when it comes to breaking into the space.
“Current exchanges are built for [hardcore] users and not for the masses,” he said.
Correction — March 2, 2022 at 9:45 am ET: The lead investor is Alan Howard, unconnected to the European asset management firm Brevan Howard.
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