AU21 Capital, one of the most influential investment firms in the blockchain and cryptocurrency space, has announced its investment in XFai, a decentralized oracle service provider. XFai has recently caught the attention of other major investors such as LD Capital and Rarestone Capital, and raised $3.8 million USD within 12 hours, an uncommon event in the context of private sales in the DeFi space.
The reason behind XFai’s recent streak of investments is its groundbreaking technology. Firms such as AU21, who are committed to “backing the most brilliant founders in blockchain,” have seen the potential in XFai to open a whole new ecosystem for small to mid-cap tokens. In total, this represents over $250 billion in crypto and DeFi projects that are not reaching their potential. A problem XFai could resolve.
These tokens usually fall prey to hidden mechanics in centralized exchanges and are unable to resort to decentralized alternatives due to low liquidity. This places them in an uncomfortable position where many of the projects fail for reasons that have nothing to do with their value proposition or technical feasibility causing investors to be locked into a downwards spiral
The XFai team has built a DEX Liquidity Oracle (DLO) that promises to level the DeFi playing field and help these projects. The DLO consists of a smart contract infrastructure that goes a step further than providing data feeds. It manages liquidity between centralized and decentralized exchanges to solve latent issues between the two and creates a more fertile ecosystem by permitting cross pollination. This allows “small cap token holders to earn token-denominated returns on autopilot,” according to XFai’s white paper.
AU21’s bet on XFai is a bet on the DLO’s potential to change the current paradigm in DeFi and create better market conditions, as the team’s outlook on the investment confirms.
“We are proud to announce our backing of XFai and their autonomous liquidity management solution for cryptocurrencies. The DEX Liquidity Oracle achieves several technological milestones in decentralized liquidity provision, and will serve to create a more efficient and accessible marketplace for digital assets.”
The firm is known for its foresight, having invested early in current industry leaders such as Binance, Huobi and Synthetix. It was also one of the first investors in Polkadot and it serves as a member of the Polkadot Venture Network as well as the Polkadot DeFi Alliance.
The strategic investment in XFai comes just before the project’s launch of an innovative funding model that breaks away from the outdated Token Generation Event (TGE) and introduces the more transparent and efficient Liquidity Generation Event (LGE). The LGE is designed to protect investors from the high gas fees, failed transactions, slippage and impermanent loss that currently plagues the DeFi space. XFai’s LGE for the $XFIT token is set to take place on April 8.