Stablecoin startup Boundary Labs is preparing to launch USBD, a "verifiable" institutional stablecoin, after raising $2 million in pre-seed funding led by Galaxy Ventures.
First Block Capital and BlackWood joined the round, among other investors, Boundary said Monday. The fundraising process began in late 2025 and closed in December, Boundary co-founder and CEO Matthew Mezger, a former Deutsche Bank and Digital Currency Group executive, told The Block.
The funding was structured as a simple agreement for future equity (SAFE) with token warrants, Mezger said, declining to disclose the valuation. No investor in the round has taken a board, advisory, or observer seat, he added.
The USBD stablecoin
Boundary's USBD stablecoin is being designed around what Mezger called "continuous" onchain verifiability of reserves, net asset value, and protocol performance. He said existing stablecoins still largely depend on trust-based offchain reporting and attestations.
"The Boundary protocol provides daily reporting on system state, including over-collateralization levels and real-time NAV calculations. USBD is engineered with explicit over-collateralization and delta-neutral hedging to protect against market direction risk and volatility," Mezger said.
Institutional stablecoin adoption, especially for treasury management, collateral, and fiduciary use cases, requires greater certainty, according to Mezger, and he said Boundary is focused on moving stablecoins from trust-based to trust-less instruments.
To achieve this, Mezger said Boundary is advancing smart contract code that moves the industry from monthly offchain attestations to daily onchain verification.
"This shift provides the structural resilience and auditability required for safe, permissionless staking and institutional fiduciary use cases, effectively transforming stablecoins into robust financial infrastructure," he said.
Focused on serving institutions
Boundary is focused on serving institutions, including asset managers, hedge funds, and family offices, and said access to its protocol will happen through a dedicated application with know your customer and know your business verification workflows.
Boundary is also planning what it calls a "private placement campaign" to onboard early institutional participants and build toward its target of reaching $100 million in total value locked in 2026.
"This phase focuses on building a robust, institutional-grade capital base for the protocol," Mezger said.
USBD itself will not be yield-bearing, but the protocol will offer a separate staked token called sUSBD, which will allow eligible institutional participants to earn protocol income generated through what Boundary describes as delta-neutral decentralized finance strategies.
As for Boundary's business model, Mezger said it is based on decentralized finance market mechanisms, including funding rates and basis arbitrage.
"All protocol income must satisfy two core principles that insulate collateral from market direction risk: first, income-generating mechanisms must be delta-neutral; and second, the protocol cannot apply recursive leverage," he said.
Revenue generated by the protocol will be used to build treasury reserves, fund operations, and distribute yield to sUSBD stakers through an onchain allocation system, Mezger said. This differs from some synthetic dollar protocols where parts of the reward distribution process happen offchain and are harder for users to audit, he added.
Boundary plans to launch the protocol, including USBD and sUSBD, on the Ethereum mainnet in early summer 2026.
Besides Mezger, the other two co-founders of Boundary are Mathias NC and Roman Drapeko, who is also the firm's chief technology officer. Mezger said the team currently operates with a lean structure and is hiring in trading and research as it prepares for launch.