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 investor Vinod Khosla, has gained fame for its early investments in companies such as Impossible Foods, Instacart, Affirm, DoorDash, Square, and OpenAI. Although Khosla Ventures has not made significant investments in the crypto space since its investment in Sam Altman's Worldcoin project in 2022, its investment in Lava undoubtedly reaffirms its strong 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 saving Bitcoin and spending in dollars.
The founder of Lava is Shehzan Maredia, who serves as both 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 groups: the Vault team focuses on building self-custody applications for Bitcoin and dollars, while the Application team is dedicated to developing various features needed to support self-custody applications.
Lava Vault, as Lava's flagship product, is designed for users who wish to save in Bitcoin and spend in dollars, including Bitcoin holders, miners, traders, Bitcoin enthusiasts, immigrants, and users from developing countries.
Lava Vault has launched on iOS and Android, providing three main features: Lava Free Pay, Lava Exchange, and Lava Smart Key.
Among them, Lava Free Pay provides instant, free, and global payment services, allowing users to make payments on the blockchain without holding Gas tokens, greatly enhancing the experience for self-custody 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 directly purchase assets into self-custody accounts but also supports fund withdrawals to bank accounts. Essentially, Lava Exchange is a centralized exchange aggregator that can guide users to the optimal price trading paths. In the future, it will 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 dollars, with Lava stating interest rates as low as 4%. Users can choose to repay the loan with appreciated Bitcoin (provided the Bitcoin price has increased) after the loan maturity and receive the remaining amount, or adjust the loan amount before maturity to suit their needs.
Subsequently, users can transfer borrowed dollars directly from Lava Vault to their bank accounts. In the future, Lava Card will also support users spending dollars directly from Lava Vault.
Lava Smart Key is the key to Lava's secure self-custody. It does not require the use of mnemonic phrases but supports the creation of a 2-of-2 backup mechanism. One half of the backup is associated with the Seed and encrypted for storage in iCloud or Google Drive; the other half is linked to the encrypted key stored on a private key server, which can only be authenticated with a user-defined 4-digit Lava recovery PIN code. This backup mechanism not only significantly ensures the security of funds but also provides a convenient asset recovery path.
For enterprises, Lava offers the opportunity to earn digital dollars through Bitcoin-backed loans. For developers, Lava supports the integration of 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 intend to launch its own token, and its Series A financing is conducted through equity financing.
