Three former engineers from the prominent crypto exchange Coinbase have launched a new venture called Nook, a crypto savings application. The team announced on Wednesday that Nook has secured $2.5 million in funding from notable venture capital firms, including Coinbase Ventures, defy.vc, and UDHC. While the company chose not to disclose its valuation in this funding round, the investment highlights growing confidence in simplified crypto savings solutions.

Nook's core mission is to democratize access to crypto holdings for users who are not inherently familiar with the intricacies of blockchain technology. The application achieves this by streamlining the process of engaging with decentralized lending protocols such as Aave and Moonwell, allowing users to lend their cryptocurrency and earn interest. According to Joey Isaacson, CEO and co-founder of Nook, the average lending platform requires users to navigate through as many as 14 different steps, creating a significant barrier to entry for those lacking deep technical understanding or sufficient time. Nook seeks to eliminate this complexity by enabling customers to sign up with a simple email address, bypassing the need to connect a crypto wallet directly.

Isaacson emphasized Nook's commitment to simplifying the user experience and ensuring regulatory compliance. Although the company plans to introduce more lending programs in the future, Nook launched publicly with an exclusive partnership with Moonwell, a lending platform established in 2021 by another Coinbase alumnus. Prior to its public debut, Nook had been steadily onboarding customers from its waitlist, which had accumulated over 50,000 individuals. These early users have reportedly seen an 8% annual return by lending their Bitcoin or other cryptocurrencies to borrowers via Nook on the Moonwell platform, a result that Nook states has been observed by users, though not guaranteed due to the inherent volatility of cryptocurrencies.

Engaging in crypto lending and borrowing carries inherent risks due to the volatile nature of digital assets. However, platforms like Moonwell mitigate some of these risks through mechanisms such as