Alkimiya secures $7.2 million funding to develop decentralized capital markets for blockspace

Alkimiya, a blockchain protocol that aims to provide hedging solutions for blockspace producers like miners and staking validators, has raised $7.2 million in a funding round led by 1kx and Castle Island Ventures.

The round, which closed in November, also featured participation from Dragonfly, Circle Ventures, and Coinbase Ventures among others.

The funding will be used to expand Alkimiya’s team as it gears up to launch a full product suite, including a Vault product and ETH staking contracts on the Ethereum mainnet in the first quarter of this year.

The company’s mission is to provide hedging solutions for blockspace producers, which are similar to traditional commodity producers.

These entities have a set of costs they bear to produce a good, or in this case, coins, but with fluctuating yields and crypto prices, they take on the risk of producing an inherently volatile and variable good without the financial instruments to manage them.

Alkimiya aims to provide these entities with the means to lock in an upfront fixed return for their future production, enabling them to manage risk, and in turn, DeFi users can tap into the value accrued by blockchain producers.

“If we look at the crypto space across the board, we need to identify naturally recurring cash flow that is sustainable and that’s relatively independent of all of these liquidity-driven activities that happening here,” said Alkimiya’s founder, Leo Zhang.

Alkimiya initially launched on Layer 1 of the blockchain Avalanche in March last year as a public beta to test out the protocol on-chain and iron out any possible loopholes.

With the recent funding, the company plans to launch its full product suite, including a Vault product and ETH staking contracts on the Ethereum mainnet in the first quarter of this year.