Crypto investors have piled into a $5.2 million seed funding round for ClayStack, a new liquidity staking platform.

The round was led by CoinFund and ParaFi Capital, but also included investments from Coinbase Ventures, the Solana Foundation, Defiance Capital and other heavyweights in the crypto ecosystem including individual investors Sandeep Naiwal of Polygon and Meltem Demirors of CoinShares. 

ClayStack’s platform, which will launch alpha testing by September, enables users to stake their digital assets without the lockup periods associated with traditional crypto staking. When users deposit their crypto in the platform’s smart contracts, they receive an equivalent liquid derivative token that remains fungible and transferable, and earns them daily rewards.

Traditional staking yields high rewards, but requires a lockup period that results in illiquidity. Innovations in the decentralized finance (DeFi) ecosystem have been attempting to solve this problem with liquid staking. One major liquidity staking platform, Liquidstake, offers liquidity in the form of USDC as a loan for staked ETH, but ClayStack’s multi-coin approach is a departure from the norm. 

“We believe ClayStack has developed an efficient solution that addresses the shortcomings of present-day liquid staking protocols,” CoinFund CEO Jake Brukhman said in a statement.

ClayStack currently supports three blockchains – the Ethereum mainnet, Polygon and The Graph. ClayStack CEO Mohak Agarwal told CoinDesk users can expect a Solana rollout shortly after launch, and a rollout to other chains in the future. 

Agarwal believes that ClayStack’s platform also caters to its users in a unique way, and can work for both small yield farmers with a few thousand dollars worth of digital assets as well as “whales moving millions or billions.”

The funds generated from the seed round will be used to hire additional staff and further build out the ClayStack platform.