Who knows Mangrove? Not many people. But in the world of "Defi"(decentralized finance), the protocol of French origin is clearly one of the rising stars.

The project has just raised $7.4 million in Series A from several large investors, such as the American Cumberland and the German Greenfield Capital, which has notably invested in Nym or Immortal Game. Mangrove had already raised $2.7 million in 2021 from the British Wintermute Ventures, the French Stake Capital and other players.

Mangrove's valuation is still confidential.

Mangrove was founded in 2021 by a team of researchers led by Vincent Danos, director of research at the National Center for Scientific Research (CNRS) and the École normale supérieure. "This fundraising from major players validates our work," says Vincent Danos, who is also behind the DeFi Morpho protocol, which he imagined in 2021 with Paul Frambot. Morpho, winner of the award for the most innovative European Web3 project in 2023.

Led by an association, MangroveDAO (16 full-time contributors), the Mangrove protocol tackles a well-known problem in decentralized finance: liquidity allocation.

Today, DeFi allows lenders and borrowers to transact without intermediaries, but the system is relatively inefficient. Lenders' capital is locked into protocols like Aave or Uniswap and too often misallocated, which hurts their profitability. "Locking up capital in one protocol does not allow for a good use of the available capital," says Gleb Dudka, a partner at the German fund, Greenfield Capital, which invested in Mangrove.

In this context, only the biggest players who manage to make volume manage to get by. But Mangrove and his team want to allow anyone, even small players and individuals, to lend money via DeFi's protocols.

To successfully get around this problem, Mangrove has developed an overlay to make this capital available on all DeFi protocols at once. The system is quite simple: the lender will deposit cryptos on Mangrove with a loan offer in a smart contract. When this offer will meet a demand, the smart contract will start to recover fees and gradually release liquidity on the protocols where the demand is. The smart contract can interact with all of DeFi's other protocols (Aave, Uniswap...), so liquidity can flow to multiple locations simultaneously and earn returns.

"DeFi is already more transparent and innovative than traditional finance, but it still lacks the tools to make it more efficient. That's what Mangrove is all about," says Miko Matsumura, managing partner at Gumi Cryptos Capital. Traditional players are warned.