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Stablecoin Protocol Level Aims to Expand $80M DeFi Yield Token With Fresh Capital Raise

Stablecoin protocol Level raised a fresh round of venture capital to expand its $80 million yield-paying stablecoin as yield-generating digital asset offerings are increasingly in demand with a cooldown in crypto prices.
Peregrine Exploration, the development firm behind Level, received another $2.6 million led by early backer Dragonfly Capital with Polychain also participating, founders David Lee and Kedian Sun told CoinDesk in an interview. New investors include Flowdesk, Echo syndicates Native Crypto and Feisty Collective by Path, and angel investors Sam Kazemian of Frax and Albert Chon of Injective.
The latest round followed a $3.4 million raise in August, bringing total venture capital funding to $6 million to date.
Level, with its lvlUSD token, is competing in the fast-growing stablecoin asset class, one of the hottest sectors in crypto and a darling among venture capital investments. Stablecoins—cryptocurrencies with a fixed price, predominantly tied to the U.S. dollar—are a key piece of infrastructure for trading and transactions on blockchains. However, the largest issuers do not generally offer yield to users earned on assets in the backing reserve. Tether, for example, reported $13 billion profits last year, in part from the U.S. Treasury yield backing its $143 billion USDT token.
That’s why a new generation of yield-earning stablecoins is getting increasingly popular among crypto investors. Ethena’s USDe, which generates yield on a market-neutral carry trade strategy harvesting futures funding rates, zoomed to above $5 billion supply in little more than a year. Meanwhile, tokenized versions of money market funds and Treasury bills, another stablecoin alternative, hit a $4.6 billion market capitalization.
Level’s stablecoin offers investors yield from putting the backing assets to work on decentralized finance (DeFi) lending protocols like Aave, while automating its reserve management. Users can mint lvlUSD by depositing Circle’s USDC or USDT stablecoins and lock up (stake) the tokens to lend out to generate yield on-chain. As of last week, annualized yield for staked version of lvlUSD stood at 8.3%, higher than tokenized money market fund yields. Meanwhile, lvlUSD has been integrated with DeFi protocols such as Pendle, Spectra and LayerZero, and can be used as collateral on Morpho.
«Their fully on-chain, transparent approach to yield generation sets them apart from competitors relying on opaque, centralized methods,» said Sven Wellmann of Polychain, one of the investors in the protocol.
According to Level’s calculation, the protocol outpaced rival stablecoins’ yield offerings over the past month, which has helped its supply surpass $80 million in five months since its beta launch.
With the latest funding, Level plans to expand their team and marketing efforts while continuing to expand utility for lvlUSD beyond staking it, Kedian Sun explained. The protocol also plans to tap into Morpho to generate yield in the next few weeks.
With those efforts, lvlUSD could potentially push towards a $200-$250 million market cap, a key milestone the team wants to achieve, Sun said.
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Microsoft Raises Alarm of Malware Targeting Coinbase, MetaMask Wallets

Tech giant Microsoft shared a new report warning of malware that targets 20 of the most popular cryptocurrency wallets used with the Google Chrome extension.
Microsoft’s Incident Response researchers raised alarms of a new remote access trojan (RAT), dubbed StilachiRAT, which could deploy “sophisticated techniques to evade detection, persist in the target environment, and exfiltrate sensitive data,” the team shared in a blog post.
According to the team, the malware was discovered in November 2024, and it could steal users’ wallet information, and any credentials, including usernames and passwords, stored in their Google Chrome browser. StilachiRAT targets 20 crypto wallets including some of the most widely-used ones like MetaMask, Coinbase Wallet, Phantom, OKX Wallet, and BNB Chain Wallet.
While the malware has not been distributed widely, Microsoft did share that it has not been able to identify what entity is behind the threat and laid out some mitigation guidelines for current targets including installing antivirus software.
“Due to its stealth capabilities and the rapid changes within the malware ecosystem, we are sharing these findings as part of our ongoing efforts to monitor, analyze, and report on the evolving threat landscape,” the team wrote.
Read more: Microsoft Shareholders Vote Down Bitcoin Treasury Proposal
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Crypto Market Maker Keyrock Launches U.S. Entity as Regulatory Climate Set to Improve

Cryptocurrency market maker Keyrock is launching a new entity in the U.S. and opening an office in New York, the company said in a press release on Tuesday.
Robert Valdes-Rodriguez, Keyrock’s chief commercial officer, will lead the development of the New York business, the company said.
Valdes-Rodriguez has more than 25 years of experience in senior management roles at traditional finance institutions including ABN AMRO, Scotiabank and Credit Agricole.
Improving regulatory clarity in the U.S. under President Donald Trump’s new administration is expected to lead to a boom in digital assets.
The Securities and Exchange Commission (SEC) has formed a new crypto task force led by Commissioner Hester Peirce to draft new regulation for the industry.
«The U.S., as the largest capital market in the world, is a natural fit for our ambitions to eventually become one of the largest players in global financial markets,» said Kevin de Patroul, CEO of Keyrock, in the release.
Keyrock was founded in Brussels in 2017, and has existing entities in Belgium, the U.K., Switzerland and France.
The crypto market maker provides liquidity to over 85 centralized and decentralized trading venues globally. The firm has 170 employees and operates across 37 countries.
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Michael Saylor’s Strategy Funding More Bitcoin Purchases With New Preferred Stock

Strategy (MSTR) Tuesday morning unveiled its latest twist at raising funds from capital markets to fund additional bitcoin (BTC) purchases, but there are indications the Wall Street spigot is slowing.
The company’s Perpetual Strife Preferred Stock (STRF) offers a fixed 10% annual cash dividend, paid quarterly, according to an SEC filing If dividends are unpaid, they compound at an additional 1% per year (quarterly), up to a maximum of 18%. The first dividend payment is scheduled for June 30, 2025.
Strategy’s initial preferred series (STRK) initially offered only an 8% interest rate. And Strategy’s series of convertible debt offerings came with negligible or even 0% interest rates (different product than preferred, of course).
Unlike common stock, STRF holders do not have voting rights but have priority in liquidation with a $100 per share liquidation preference. Strategy has the right to redeem STRF if fewer than 25% of the original shares remain or if tax events occur, while holders can demand a buyback in case of a fundamental change.
STRF is expected to trade on Nasdaq within 30 days of issuance, offering investors bitcoin exposure with a high-yield structure. Morgan Stanley, Barclays, Citigroup, and Moelis & Company are joint book-running managers for the offering, conducted under an SEC shelf registration.
After buying bitcoin at a galloping pace over the past several months, Strategy’s fundraising and token acquisitions have slowed to a crawl in recent weeks. The company last week did make additional bitcoin purchases, but they were hardly needle-moving — just 130 BTC for $10.7 million to bring total holdings to 499,226 tokens.
MSTR is lower by 5% in early action Tuesday alongside a slide in markets in general and bitcoin’s dip to $81,300 from $84,000 a day ago.
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