GoGoPool, a decentralized staking protocol on Avalanche, raised $5 million in a seed round co-led by Framework Ventures and Coinfund. Other investors in the round include Avalaunch, Republic Capital and Flow Traders, according to a release on Wednesday.
Staking protocols are vital in helping to secure proof-of-stake blockchains. They enable individuals to stake their tokens to help verify transactions on the network and, in return, to receive rewards.
In recent months, liquid staking — a slightly different process to normal staking — has become increasingly popular. It enables users to lock up funds to earn rewards for securing the network, while maintaining access to those funds through a derivative of the staked token. Lido popularized liquid staking on the Ethereum network.
GoGoPool is a new staking outfit that aims to bring liquid staking to Avalanche, a Layer 1 blockchain, while also simplifying the process of launching subnets on the Avalanche blockchain.
What are subnets?
Subnets are blockchains that can be spun up on Avalanche for specific applications or services. John Wu, the president of Ava Labs, described this as being like “blockchain as a service” in an interview with The Block.
Steven Gates, co-founder and CEO of GoGoPool, said that when he tried to build his new startup on Avalanche, he realized that launching a subnet can be a costly process.
“There's two main problems [with subnets],” Gates said. “One, there's like no open-source tooling for developers. So, it's still frictional. And the second is the economic cost of running a subnet is extremely high, like totally untenable.”
GoGoPool, launched earlier this year, aims to remove some of the challenges entrepreneurs face setting up infrastructure for subnets.
GoGoPool offers pools where hardware operators will validate a subnet in exchange for rewards. This means that subnets can get validators straight away, removing one of the big pain points of getting them off the ground.
Liquid staking on Avalanche
Both retail and institutional players can also use GoGoPool for liquid staking. On GoGoPool, stakers will receive ggAVAX tokens to represent their staked AVAX, according to the release.
“We're really focused on using liquid staking as a streamlined way to onboard people into subnets because we really think subnets are poised to become the WordPress or Shopify moment,” Gates said. “What they did for web2, I think subnets can do to web3.”
The proceeds of the fundraise will be used to expand GoGoPool’s team, accelerate product development ahead of launching on mainnet, and for developing new open-source tooling for subnets, Gates added.
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