Blockchain protocol Polygon has announced a new DeFi fund with the aim of bringing the fledgling financial sector to a wider user base.

In an April 28 blog post, the platform formally known as Matic stated that it’s launched a $150 million fund. Its goal is to make decentralized finance (DeFi) more accessible and cost-effective to onboard the next million users.

The high-speed blockchain protocol has identified a major problem with the current setup that is only really profitable for crypto whales when network fees are high.

“The #DeFiforAll Fund was set up to bring the benefits of DeFi to a larger user base that was earlier priced out.”

Polygon commented that a number of high-profile DeFi platforms, such as Curve Finance and Aave, have launched on the network to offer faster and cheaper DeFi and open the industry up a little more.

There have been more protocols seeking Layer 2 implementations and better scaling solutions as the Ethereum network, which is the backbone of all things DeFi, has been strained under the increased demand.

Polygon noted that it’s seen smaller capital sizes but rapid growth in user numbers for protocols that have moved to its blockchain. Aave, for example, has seen more than 7,500 users lock over $1 billion in liquidity within weeks from its launch on Polygon.  

The funding will come from the network’s ecosystem fund in MATIC tokens. It will be deployed over the next two to three years. It didn’t specify exactly how the funds would be used to expand the ecosystem but hinted at more yield farming incentives.

“We’ve supported Aave and Curve with massive liquidity mining programs, and we hope to support the best DeFi protocols from the DeFi fund, and take their incredible products to the masses and Polygon’s incredible community.”

There are a number of common obstacles for anyone new trying to enter the multifaceted world of decentralized finance.

As noted by Polygon, the largest one is the cost of transacting on the Ethereum network. According to Etherscan, the current cost of interacting with a yield farm smart contract is around $25. It should be noted that this number is low compared to what’s been seen in recent weeks).

This means that small transactions are mostly economically unfeasible. Newbies to DeFi aren’t exactly arriving with big bags full of ETH.

The technical know-how in dealing with wallets, transactions, and crypto, in general, is also off-putting to most. It needs to be as simple as using an online banking app.

Regulations are also major hindrances in many countries that have overreaching identity or taxation requirements for converting back into fiat.

Promoting a faster blockchain is just one step on the road to global DeFi adoption, but it is a start.

The post Polygon Launches $150M Fund to Bring DeFi to the Masses appeared first on BeInCrypto.

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