Written by: Xiaobing
On October 6, Founders Fund, led by Peter Thiel, led a $5 million token purchase in the DeFi protocol Anvil. Participating investors included Pantera Capital, Theta Blockchain Ventures, Bullish (NYSE: BLSH), and Protoscale Capital. Among the individual investors were Compound founder Robert Leshner (now CEO of Superstate) and Celo co-founder Rene Reinsberg.
On the day the news was announced, ANVL rose more than 83%, with its market capitalization briefly reaching about $109 million.
There are two details of this deal worth breaking down. Founders Fund bought ANVL tokens, not equity in the company behind Anvil. The tokens came from Anvil's existing treasury, with no new tokens issued.
What is Anvil?
The most critical step in understanding Anvil is to figure out what it is "not."
It is not a lending protocol. In Aave or Compound, users deposit assets as collateral and then borrow another asset, paying interest. If the value of the collateral falls, they face liquidation.
Anvil does something completely different. Users lock ETH or USDC into Anvil's Vault and receive an "on-chain Letter of Credit" (LOC). This letter of credit is a verifiable economic guarantee proving that "this person has sufficient assets as backing to honor his financial commitments."
Letters of credit are one of the oldest financial instruments in the commercial world. The logic of a bank letter of credit is simple: the buyer's bank issues a commitment to the seller, guaranteeing that as long as the seller provides the agreed documents (shipping documents, etc.), the bank will pay. The circulation of trillions of dollars in goods in global trade depends on this mechanism.
Anvil brings this logic on-chain and removes the bank in the middle. Users lock their own assets, smart contracts automatically verify whether the collateral is sufficient, and the status of the letter of credit is queryable in real time by any counterparty.
Founders Fund partner Joey Krug (co-founder of Augur) said in the announcement: "Businesses need to know that the commitments behind payments and credit will be honored. Anvil lets them secure these commitments with verifiable digital asset collateral."
Where is it specifically used?
Saying "letter of credit" may still be too abstract. Let's look at a few scenarios that are already running or being integrated.
Payment guarantees. Flexa (the crypto payment network previously co-founded by Tyler Spalding) integrated its Capacity v3 system with Anvil in March 2025. When a merchant accepts crypto payments through Flexa, Anvil's letter of credit guarantees the final settlement of that payment. Even if the underlying blockchain confirmation takes time, the merchant can immediately receive confirmation that "payment is guaranteed."
Instant exchange deposits. Bullish (the parent company of CoinDesk, listed on the NYSE) is exploring the use of Anvil to enable instant margin deposits for traders. In the traditional process, when a trader transfers assets from an external wallet, they need to wait for on-chain confirmation; through Anvil's letter of credit, the exchange can grant trading credit the moment the assets are locked in the vault.
Business-to-business credit guarantees. Anvil's SDK allows businesses to integrate the protocol without writing blockchain code. Consensus and Bitcoin.com are also listed as partners.
The common point of these scenarios is: there is no need to "borrow" anything, only to "prove" that you have money, and that this money has been locked and cannot be misappropriated.
Protocol economic model: zero fees + governance token
Anvil charges no transaction fees at the protocol level. This is a design choice completely different from most DeFi protocols.
No fees means the protocol itself generates no direct revenue. Its economic model relies entirely on the governance value of the ANVL token: holders vote to decide which collateral types the protocol supports, how letter of credit parameters are set, which external contracts can be integrated, and so on.
ANVL has a total supply of 100 billion tokens, with about 80 billion currently in circulation. The source of the token's value does not come from protocol dividends (because there are no fees to distribute), but rather from the idea that "if Anvil becomes the infrastructure for commercial credit guarantees, then governance rights over this infrastructure have value."
This is an extreme long-term bet. If Anvil's usage grows to a sufficiently large scale, governance rights will become scarce and valuable; if usage remains limited, governance rights will be nothing but empty words.
Beyond the optimistic narrative, several cold data points need to be faced directly.
As of publication, Anvil's TVL on DefiLlama is about $14 million. This number may not seem large, but it ranks first in the "Collateral Management" category, accounting for more than 90% of the category's total TVL, because the track itself is still too small, with only two tracked protocols.
But the historical trend of TVL is more telling. In July 2025, Anvil's TVL once peaked at about 36,000 ETH (about $109 million). Since then, it has slid all the way to the current $14 million, a decline of about 87%.
The current price of the ANVL token is about $0.00098, down about 89% from its all-time high of $0.0093 on January 3, 2025. Even including the 83% single-day gain after this news, the token remains in a historically low range.
Key judgment points of the investment logic
What Founders Fund bought this time is not the token of "yet another DeFi lending protocol," but a bet: whether on-chain letters of credit can become as large a category as on-chain lending.
The size of this bet is not large. $5 million is just an exploratory position for Founders Fund (the fund just completed the largest fundraising in history at $6 billion in May 2026). But with Joey Krug personally endorsing it, plus Robert Leshner's personal participation, the signal significance is greater than the amount of capital.
Several variables that need continuous tracking:
After the SDK is released, how many businesses actually begin integrating Anvil? Among the current partner list of Flexa, Bullish, Consensus, and Bitcoin.com, Flexa is the only one that has already completed deep integration. Whether the others are "exploring" or "already deployed" makes a huge difference.
Is the zero-fee model sustainable? At the current stage, development can be maintained through treasury tokens, but in the long run, the protocol either needs to introduce some form of fees or needs the price of the ANVL token to rise to fund the development team.
Does the letter of credit track have enough on-chain demand? The global traditional letter of credit market is measured in trillions of dollars, but how much of this demand will migrate on-chain depends on the progress of enterprise-level crypto adoption as a whole.
