Solana-based DEX Lifinity Raises $9.6M in IDO

Lifinity, a Solana-based decentralized exchange, raised $9.6 million in a recently concluded initial decentralized offering (IDO). The project raised the amount from over 2400 contributors representing wallet addresses that committed funds to the token sale.

Lifinity labels itself as a unique kind of DEX, “a proactive market maker with concentrated liquidity.” Unlike competing DEXes where third-party market makers and venture capital liquidity providers are required to fund pools, Lifinity aims to own its liquidity. 

The project had seeded its initial pools with 15,000 SOL (appr. $3 million) raised from the sale of so-called Lifinity Flares NFTs in December. The project uses a portion of fees generated from the provided liquidity to buy back the NFTs, thus creating value for holders.

Lifinity says it plans to do the same for the recently raised $6.8 million from the sale of LFNTY tokens. Over 80% of the raised funds will be added to the platform’s existing liquidity pools with a view to generate profit that is paid out as a reward to holders of veLFNTY, a locked version of LFNTY.

Lifinity vs Solana DEXes

Although Lifinity hopes that its unique funding model and proactive approach to DEX operation would give it staying power, the project still faces an uphill task on its quest to become the preferred option for Solana’s growing user base. 

Solana is already home to a number of more prominent DEXes, including Raydium, Orca, and Saber. At this time, smaller projects like Lifinity tend to attract trading volume by offering the best rates for swaps on DEX aggregators like Jupiter.

Meanwhile, the $9.6 million raised by Lifinity while pioneering a model that favors community over venture capital liquidity providers may set a new precedent for the IDO landscape. Back in September, Orca raised $18 million in a funding round led by Polychain and Three Arrows Capital. Lifinity’s arguably successful funding round amid differing market conditions might convince projects pursuing similar efforts to tilt toward a community-based approach instead of the more popular VC-first method.