Expansion of lvlUSD Stablecoin's Yield-Generating Capabilities, Facilitated by New Financing Led by Dragonfly Capital
In a recent funding round, Level, a leading stablecoin protocol, raised $2.6 million, bringing the total amount raised to $6 million. This new investment will be used to scale the adoption of the protocol's yield-bearing stablecoin, lvlUSD.
The lvlUSD stablecoin is not only used as collateral on Morpho, but also on various other DeFi protocols such as Pendle, Spectra, and LayerZero. The team at Level plans to add Morpho, a lending protocol for on-chain loans, as a source of yield for lvlUSD within weeks.
Unlike many competitors, lvlUSD's main source of yield is not just passive staking or fixed lending rates. Instead, it employs a multi-strategy approach that includes algorithmic rebalancing across high-yield DeFi protocols, leveraging yield farming opportunities with dynamic risk-adjusted strategies, and smart contract mechanisms that optimize collateral deployment to sustain the stablecoin peg and maximize yield.
This active and diversified approach sets lvlUSD apart from competitors that primarily generate returns through interest lending or staking in a limited set of protocols. By exploiting varied DeFi yields while mitigating the risk of de-pegging, lvlUSD offers more consistent and potentially higher yields.
The expansion plan for Level Finance's lvlUSD focuses on integrating with multiple DeFi protocols and platforms, increasing its use cases for payments, lending, and trading. This broad integration aims to boost liquidity and attract a larger user base, securing a competitive edge in 2025’s crowded stablecoin market.
As of late July 2025, lvlUSD trades close to $1 with a market cap around $74 million, reflecting growing adoption. The token LVL, related to Level Finance, is distinct from lvlUSD but supports the ecosystem.
Key investors in the funding round include Flowdesk, Echo syndicates Native Crypto and Feisty Collective by Path, angel investors Sam Kazemian of Frax, and Albert Chon of Injective, among others. The round was led by Dragonfly Capital and participated by Polychain Capital. Polychain Capital's Sven Wellmann stated that Level's approach to yield generation is fully on-chain and transparent, setting it apart from competitors relying on opaque, centralized methods.
In summary, lvlUSD’s expansion plan centers on cross-protocol integration and advanced yield optimization strategies, distinguishing it from competitors that rely on simpler, static yield methods.
Finance news highlights that Level, a leading stablecoin protocol, is diversifying its yield sources with plans to add Morpho, a lending protocol, to its list of integrated DeFi platforms for optimized collateral deployment and potential higher yields. The technology-driven approach, which includes algorithmic rebalancing and smart contract mechanisms, sets lvlUSD apart from competitors that primarily focus on passive staking or fixed lending rates in finance investing.
