Stablecoin protocol Level has raised an additional $2.6 million in venture capital to bolster its yield-generating stablecoin, lvlUSD. This comes as demand for yield-producing digital assets increases amidst a slowdown in cryptocurrency prices.

Peregrine Exploration, the firm behind Level, saw this funding led by Dragonfly Capital with Polychain also contributing. Notable new investors include Flowdesk and several angel investors. The total venture capital funding for Level now stands at $6 million.

The lvlUSD has gained traction in the competitive stablecoin market, which is rapidly growing as investors look for reliable returns. Unlike traditional stablecoins, which typically do not provide yield, lvlUSD allows users to earn by lending through decentralized finance protocols.

“Their fully on-chain, transparent approach to yield generation sets them apart from competitors relying on opaque, centralized methods,” noted Sven Wellmann from Polychain.

With this fresh capital, Level aims to expand its offerings and user base, targeting a market cap between $200-$250 million in the upcoming months.