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How does Entangle, the cross-chain DeFi protocol that continues to write the LSD track and intends to enter the re-staking field, interact?

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Entangle envisions a future where DeFi dApps are not limited by a single blockchain.

On January 10th, cross-chain DeFi protocol Entangle announced the completion of a $4 million seed and private funding round. Institutions such as Big Brain Holdings, Launch Code Capital, LBank Labs, Skynet EGLD Capital, Cogitent Ventures, Owl Ventures, Faculty Group, and Seier Capital participated in the funding. The new funds will be used to enhance the protocol's technology, expand its global influence, and strengthen its role in cross-chain and interoperable data advancement.

Previously, Entangle was highly praised for achieving cross-chain liquidity through Liquid Vaults. Now, with the staking trend heating up, this protocol, which began laying out staking projects a year ago, has entered the public eye. In addition, the project's investor, Big Brain Holdings, is also one of the reasons why this project is worth paying attention to.

This cryptocurrency venture capital firm, established in 2021, is not particularly well-known in the industry. However, its "record" shows many excellent projects, including the NFT project Pudgy Penguins, which was invested in last May, and the modular blockchain Dymension.

Recently, in the financing data compiled by BlockBeats, the figure of Big Brain Holdings has frequently appeared. As the first investment project of Big Brain Holdings in 2024, the cross-chain DeFi protocol Entangle, which comes with its own narrative of staking, is worth mentioning.

Big Brain Holdings: From Solana to Cosmos

Big Brain Holdings is a cryptocurrency fund that invests in pre-seed, seed, and early-stage projects. According to rootdata, since October 2021, Big Brain Holdings has invested in a total of 163 projects, with DeFi projects being the main focus of its investments.

In Big Brain Holdings' investment list, it can be seen that as early as February last year, Big Brain Holdings led the investment in Dymension. At that time, the Dymension team had only 9 employees. Today, with the 70 million DYM genesis airdrop, Dymension has become well-known in the community. However, Big Brain Holdings did not gain more exposure because of this.

From an ecological perspective, Big Brain Holdings' early investment direction was mainly based on Solana ecological projects, such as Zebec Pay, a real-time streaming payment protocol based on the Solana platform, Helius, a Solana infrastructure, Elusiv, a privacy protocol, MeanFi, a Solana fund management platform, Hawksight, a DeFi super application, DarleyGo, an online horse racing game built on Solana, and so on.

In the second half of 2023, as the Solana ecosystem heats up again, Big Brain Holdings continues to invest in Solana, such as lightweight wallet TipLink, NFT project Drip, social platform Sleek, etc. During this period, there is little attention paid to projects based on Polygon, Avalanche, Aptos or other Layer1 ecosystems. Apart from "Dollar-Cost Averaging" Solana, there is almost no investment strategy for other ecosystems.

Building on this foundation, Big Brain Holdings led the investment in Dymension in February 2023, but the Cosmos project did not appear. However, in two recent consecutive investments, both are related to Cosmos, including the modular token release and liquidity solution Eclipse Fi, and the cross-chain DeFi protocol Entangle, which will be detailed in this article.

Entangle How to Achieve Liquidity Cross-Chain

Entangle is a DeFi protocol that utilizes synthetic derivatives to coordinate liquidity and add value to liquidity in the general Layer1 and Layer2 ecosystems. It consists of three core components: Entangle blockchain, Entangle Oracle, and Entangle DEX.

Entangle DEX allows users to exchange between USDC and LSD, and create, trade, and manage their LSD. Entangle DEX also supports cross-chain exchange through Entangle Oracle. Entangle Oracle is a decentralized oracle solution that allows cross-chain communication and data transfer between different blockchains and protocols, supported by trusted validators and oracle networks that stake NGL as collateral.

Two LSD Applications

Entangle envisions a future for DeFi dApps that is not limited by a single blockchain. This involves establishing an interoperable cross-chain liquidity sublayer that seamlessly connects different chains, allowing users to access liquidity positions on any chain with just one click.

In short, Entangle allows users to seamlessly interact with liquidity pools across different chains.

This process utilizes synthetic derivatives to coordinate liquidity. To this end, Entangle provides two applications that use LSD, Liquid Vaults and Synthetic Vaults.

Synthetic Vaults is a protocol that allows users to create synthetic assets LSD. Users can deposit USDC into Synthetic Vault and receive LSD that tracks the price of any asset (such as stocks, commodities, or cryptocurrencies). Then, users can use their LSD to access different markets, hedge risks, or exchange on Entangle DEX.

Synthetic Vaults allows for the optimal utilization of liquidity position assets (xLSD) across multiple chains. For example, Pete provides liquidity on CurveFinance and receives corresponding LP tokens, which are then collateralized on Entangle. Entangle will automatically compound the LP tokens on ConvexFinance for additional returns.

Liquid Vaults is a protocol that allows users to create yield-generating assets called LSD. Users can deposit their liquidity tokens (such as LP tokens or staking tokens) into Liquid Vaults and receive LSD as a reward. They can then stake the LSD to secure the infrastructure or trade it on Entangle DEX.

Entangle's Liquid Vaults converts idle LP tokens worth over $14 billion by unlocking them into composable LSD.

Liquid Vaults supports 1:1 asset-backed LSD through Entangle's universal data source to achieve a wider range of yield asset utility, thereby optimizing liquidity. For example, in lending and derivative protocols, users can deposit Liquid Vault as collateral to borrow assets or increase yield.

Entangle Infrastructure

In order to ensure seamless cross-chain communication and interoperability, Entangle has developed a custom oracle infrastructure. This infrastructure utilizes DPoS Cosmos-SDK EVM Compatible and Tendermint consensus algorithms to validate on an Oracle-centric blockchain.

With the support of the Entangle infrastructure, Liquid Vaults can also serve as an interoperable medium for synthetic RWA, while maintaining composability and transferability across multiple ecosystems.

The core of Entangle infrastructure is customizability, which provides builders and protocols with complete customization options for secure, verifiable, and interoperable data. This includes a modular blockchain center for launching and executing smart contract operations. Currently, builders can design custom systems to enhance control over processing and executing cross-chain operations.

In addition, the Entangle infrastructure also provides flexibility for custom consensus mechanisms and custom off-chain entities for on-chain or off-chain data collection and validation. This design allows for the integration of custom administrator data aggregation and validation processes.

Entangle Blockchain is a custom blockchain built on the Cosmos SDK, hosting the Entangle Oracle solution and Entangle DEX. It is protected by the DPoS Tendermint consensus algorithm and uses NGL as its native token, divided into application layer, module layer, and core layer. The Oracle solution acts as a bridge, enabling different chains to effectively communicate and share information.