What is Folks Finance? Raised $6.2 million to build a cross-chain Decentralized Finance protocol, and the FOLKS Airdrop will start on November 6th

What is Folks Finance? Folks Finance is a cross-chain decentralized finance (DeFi) protocol whose core positioning is to become a comprehensive capital market hub connecting multi-chain ecosystems. It will launch the FOLKS airdrop on November 6.

The project’s biggest highlight is its deep integration with top cross-chain infrastructure such as Chainlink CCIP, Circle CCTP, and Wormhole, enabling seamless cross-chain lending and asset management of native assets. Its goal is to fundamentally solve the long-standing liquidity fragmentation problem in the DeFi space. With a clear vision, a capital-validated business model (raising a total of $6.2 million), and a reasonable tokenomics design, Folks Finance has become a noteworthy player in the cross-chain DeFi track.

01 In-Depth Project Analysis

Folks Finance’s technical architecture is built on the core concept of “xChain Hub,” which combines Chainlink CCIP (for cross-chain communication and execution), Circle CCTP (for native cross-chain transfer of USDC), and Wormhole (for universal messaging) to create a secure and efficient multi-chain operation layer. The core solution allows users to manage assets across Ethereum, Base, Arbitrum, Avalanche, BNB Chain, and other chains directly within a single interface, without relying on traditional bridges or wrapped assets. For example, users can deposit ETH native assets on Arbitrum into a pool and borrow AVAX on Avalanche, with all operations atomically completed within the protocol. Use cases range from simple retail borrowing and lending, leverage strategies, to complex fund management for institutional clients. Recently launched tokenized real-world assets (RWA) such as gold and silver lending services further broaden its connection with traditional finance.

02 Team and Funding

The project’s co-founder and CEO is Benedetto Biondi, but the backgrounds and resumes of other core team members are limited in public information, which presents some challenges for transparency and long-term trust.

In terms of funding, the project demonstrates strong institutional appeal: it recently completed a $3.2 million Series A funding at a valuation of $75 million, led by Borderless Capital, with participation from Algorand Ventures, Mapleblock Capital, and others. With previous funding rounds included, the total funding amount reaches $6.2 million, supported by top venture capital firms like Jump Crypto and ParaFi Capital. This funding history not only validates its business model potential but also provides strategic resources for future ecosystem integration and business expansion.

03 Tokenomics Model

The FOLKS token is the governance and incentive core of the Folks Finance ecosystem, with a fixed total supply of 50 million tokens. Its economic design favors community and ecosystem development, accounting for nearly 60% combined, while strict lock-up periods are implemented to suppress early selling pressure, reflecting the project team’s commitment to long-term growth.

Total Supply

The total supply is set at 50 million tokens, balancing scarcity with broad ecosystem incentives. The fixed cap means no inflationary pressure, and token value growth will be driven entirely by protocol demand. Compared to many DeFi projects with billions of tokens in supply, this is more conservative, and if the protocol captures substantial fees, the value per token could be strongly supported.

Token Distribution:

Community: 35%

Ecosystem Growth: 24.73%

Seed Supporters: 21.83%

Core Contributors: 10%

Strategic Supporters: 4.94%

Advisors: 3.5%

In the distribution plan, community (35%) and ecosystem growth (24.73%) dominate, ensuring sufficient incentives for network effect initiation; meanwhile, seed, strategic supporters, team, and advisors (totaling 40.27%) are subject to long lock-up periods, deeply binding internal interests with the protocol’s long-term health.

Initial Circulating Supply

The initial circulating amount is approximately 12.7 million tokens (25.4% of total), mainly from community incentives, public sales (if any), and initial ecosystem fund releases. The core strategy is “controlling sell pressure and guiding liquidity”: about 74.6% of tokens are locked, with seed round, strategic round, core contributors, and advisors’ tokens having lock-up periods ranging from 12 to 30 months. This design helps avoid sharp price fluctuations caused by large internal sell-offs at launch, providing a relatively stable environment for secondary market price discovery. Investors should also monitor future unlock schedules, as ongoing unlocks from various rounds may introduce potential selling pressure over time.

Core Functions

• Governance Rights: FOLKS holders have voting rights over key protocol parameters, including but not limited to new asset types, interest rate models, fee structures, and treasury fund usage. This on-chain governance entrusts the protocol’s future development to the community, embodying the decentralization spirit of DeFi. As the protocol grows more complex (e.g., incorporating RWA and NFT lending), governance decision importance will increase, enhancing the practical value of the token. An active, engaged governance community is fundamental to the protocol’s long-term success.

• Incentives and Value Capture: Tokens are used to incentivize liquidity providers and protocol users, guiding network effects. Its unique feature is flexible reward claiming: users can choose to claim all liquidity incentives immediately or commit to linear unlocking for additional rewards. This mechanism cleverly balances “instant gratification” and “long-term commitment,” encouraging long-term thinking and fostering a loyal user base. Regarding value capture, the protocol may generate revenue from lending spreads and other sources, which could be used to buy back and burn FOLKS tokens or directly distribute to stakers, directly linking protocol income growth to token value.

• Ecosystem Utility Integration: As the core of the Folks Finance ecosystem, the utility of FOLKS extends as product lines expand. It currently serves as a credential for accessing advanced platform features and participating in specific activities. Future utility may further penetrate into liquidity staking (e.g., with gALGO), fee discounts on the Folks Router DEX aggregator, and upcoming NFT lending scenarios. This cross-product utility aims to create an internal economy around FOLKS, boosting its demand rigidity.

04 Market Performance

Since the token has not yet been officially listed for trading, there is no historical price or trading volume data. Community engagement, despite the 35% allocation to the community indicating emphasis on community building, remains unclear in terms of social media followers (X/Twitter, Discord), interaction frequency, and developer activity. Price forecasts depend on fundamentals and market conditions: given its solid funding background, technical integration, and small initial circulating market cap, early trading may experience high volatility driven by liquidity constraints and market attention. Investors can compare with similar cross-chain projects in the same sector for valuation benchmarks.

05 Competitive Advantages

Folks Finance’s core competitive advantages are threefold:

First, its forward-looking and secure technical integration, choosing industry-recognized safe cross-chain infrastructure (Chainlink CCIP, Circle CCTP) rather than building bridges independently, greatly reduces cross-chain smart contract risks and builds trust for institutional capital.

Second, its comprehensive product matrix surpasses a single lending protocol, offering a full suite of DeFi solutions including lending, liquidity staking, DEX aggregation, and RWA, creating strong product synergy.

Third, its clear institutional pathway—by integrating RWA and focusing on compliance—Folks Finance actively bridges TradFi and DeFi, providing a narrative advantage for capturing incremental funds in the next bull run.

06 Risks and Challenges

• Technical Risks: Despite reliance on top cross-chain infrastructure, cross-chain interactions remain high-risk in DeFi. Dependence on third-party protocols like Wormhole could pose security vulnerabilities that may impact the entire Folks Finance platform.

• Regulatory Risks: Its RWA products and future NFT lending services may easily trigger regulatory issues related to securities laws and money transfer regulations in various countries. Uncertain regulatory policies pose potential development obstacles.

• Market Competition: The cross-chain DeFi track is highly competitive, with Folks Finance facing challenges from established giants like Compound and Aave, as well as emerging cross-chain protocols. Success depends on rapidly increasing total value locked (TVL) and establishing a robust cross-chain liquidity network effect.

Future Outlook

What is the long-term value of Folks Finance? It is not just a lending protocol but aims to be a foundational capital market protocol in the multi-chain DeFi world. Its development path is clear: in the short term, ensure smooth token listing and activate community governance; mid-term, continue multi-chain expansion and replicate successful experiences from Algorand to EVM-dominated ecosystems; long-term, realize its vision of connecting TradFi and DeFi. If it can attract institutional users and generate substantial revenue through RWA and other innovative products, FOLKS, as the value capture endpoint of its ecosystem, holds significant long-term investment potential. Investors should closely monitor key indicators such as TVL growth, cross-chain trading volume, and community governance activity.