DeFi mortgage protocol PWN raised $2 million in funding, reaching a valuation of $42 million, the firm's Chief Marketing Officer Tereza Starostová told The Block.

Backers included Digital Finance Group, IQTEC, Starkware, Nethermind, Safe Ecosystem Foundation, Dialectic, Next Web Capital, Patricio Worthalter, Christoph Jentzsch, Danny Ryan, Tim Beiko, Alex Van de Sande, Lefteris Karapetsas, Luis Cuende, Anthony Sassano and Eric Conner.

Dialectic, and angels Patricio Worthalter, Tim Beiko, Will Harborne, Kenneth Ng and Chris Waclawek previously funded PWN.

PWN plans to use the funds to build out its DAO to help give control of decentralized mortgage financing over to its community, as well as to deploy most EVMs chains, collateral value assessment improvements, customized loan flow and other accessibility features, Starostová said.

Growing demand for loans

"With growing adoption of cryptocurrencies and the rise of the crypto-native movement, the demand for these loans will only increase," PWN co-founder Josef Je said in a statement. "An infrastructure-building protocol like PWN represents an undeniable opportunity enabling DeFi mortgages at scale."

PWN is a peer-to-peer platform that allows individuals to back loans using digital assets, such as cryptocurrency and NFTs, as collateral. Borrowers can use any ERC token as collateral without the risk liquidation before the loan expires.