Interest-free lending protocol Hedge said Tuesday it raised $3.7 million in a seed funding round led by Race Capital with participation from Pantera Capital and other investors.

The project is planning for a public launch during the second quarter of this year as decentralized finance (DeFi) on Solana eclipses $6.7 billion in total value locked (TVL).

“Currently, there is a huge opportunity in the Solana ecosystem because 80% of Solana is not locked in DeFi," Hedge co-founder and CEO Sebastian Grubb said in a statement. “With Hedge we’re really trying to upgrade the whole Solana DeFi ecosystem. We want to help users unlock more liquidity and better leverage their assets without having to exit their positions.”

Hedge offers interest-free loans that provide users with instant liquidity without creating a taxable event with ongoing interest payments. Users can deposit and borrow against their Solana (SOL) tokens, and Hedge provides the loans in USH, its dollar-pegged stablecoin.

On the collateral front, the loans can have up to 90% loan-to-value (LTV), a ratio between the loan amount and the value of the collateral.

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New York-based Hedge was founded by former Google project manager Grubb and Work.com founder Chris Coudron.

Other participants in the funding round included Pantera Capital, DCM, Solana Ventures and Shima Capital, among others. The new funding will help Hedge expand its team and make its liquidity vaults available to the general public this quarter.

“Liquidity is a common pain point for Web 3 users, but Hedge is simplifying access to liquidity, lowering barriers for both new and veteran users,” said Pantera partner Paul Veradittakit in a statement.