Lava completed a $10 million Series A funding round in December, with investors including Khosla Ventures, one of OpenAI's first investors.
Written by KarenZ, Foresight News
After the crypto lending industry experienced the turmoil of giants such as Genesis, BlockFi and Celsius, an indisputable fact gradually emerged: while ensuring the safety of users' self-custody, providing efficient and convenient loan services has become the core proposition of the industry's development. Today we are going to introduce Lava, a financial application that supports Bitcoin lending.
At the end of 2024, Lava completed a $10 million Series A financing, led by Founders Fund and Khosla Ventures. Among them, Founders Fund has been relatively active in the Crypto field, investing in popular projects this year such as Polymarket, modular blockchain project Avail, Pudgy Penguins parent company Igloo, Rollup as a service platform Caldera, Bitcoin Rollup project Citrea, Solana infrastructure provider Helius, and open source AI platform Sentient.
Khosla Ventures, a private venture capital firm founded by billionaire venture capitalist Vinod Khosla, is famous for its early investments in companies such as Impossible Foods, Instacart, Affirm, DoorDash, Square, and OpenAI. Although Khosla Ventures has basically not made any investments in the crypto space since its investment in Sam Altman's Worldcoin project in 2022, its investment in Lava undoubtedly once again demonstrates its firm confidence in Lava.
What is Lava?
Lava, a Bitcoin financial application with the slogan "Save in Bitcoin, Spend in Dollars", is committed to building an application for Bitcoin savings and US dollar spending.
The founder of Lava is Shehzan Maredia, who also serves as CEO and CTO. Most of the introductory articles on the Lava website are also written by Shehzan Maredia himself. The Lava team is divided into two core teams: the Vault team and the Application team. The former focuses on building self-hosted applications for Bitcoin and US dollars, while the latter is committed to developing various functions required to support self-hosted applications.
Lava Vault, as Lava's flagship product, is designed for users who want to save in Bitcoin and spend in US dollars, such as Bitcoin holders, miners, traders, Bitcoin enthusiasts, immigrants, users in developing countries, etc.
Lava Vault is now available on iOS and Android versions, and provides three main functions: Lava Free Pay, Lava Exchange and Lava Smart Key.
Among them, Lava Free Pay provides instant, free and global payment services, allowing users to pay on the blockchain without holding Gas tokens, greatly improving the experience of self-hosted users. Lava currently supports USDC on the Solana blockchain and plans to integrate other chains in the future.
Lava Exchange provides users with a convenient channel for purchasing and withdrawing Bitcoin. It not only allows users to purchase assets directly into self-custodial accounts, but also supports withdrawing funds to bank accounts. In essence, Lava Exchange is a centralized exchange aggregator that can navigate users to the trading path with the best price. In the future, it will also integrate more centralized exchanges and aggregate across decentralized exchanges to provide users with a unified exchange aggregator service.
After purchasing or depositing Bitcoin, users can use the Lava loan protocol to collateralize Bitcoin to borrow U.S. dollars, with Lava saying interest rates are as low as 4%. Users can choose to repay the loan with increased Bitcoin (assuming Bitcoin prices rise, of course) and receive the remainder after the loan expires, or they can adjust the loan amount to suit their needs before the loan expires.
Users can then transfer the borrowed dollars directly from Lava Vault to their bank accounts. In the future, Lava Card will also allow users to spend dollars directly from Lava Vault.
Lava Smart Key is the key to Lava's secure self-custody. Instead of using a mnemonic, it supports the creation of a 2-of-2 backup mechanism. Half of the backup is associated with the Seed and stored encrypted in iCloud or Google Drive; the other half is bound to an encrypted key stored on a private key server that can only be authenticated by a user-defined 4-digit Lava recovery PIN. This backup mechanism not only ensures the security of funds to a large extent, but also provides a convenient way to recover assets.
For businesses, Lava provides the opportunity to earn digital dollars through Bitcoin-secured loans, while for developers, Lava supports the integration of its various features such as Lava Free Pay, Lava Loans Protocol, Lava Exchange, and Lava Smart Key.
It is worth mentioning that, unlike many other crypto startups, Lava does not plan to launch its own token, and its Series A financing is also conducted in the form of all-equity financing.
