Crypto Investors Are Pouring Millions Into Blockchain Projects

Updated on

Everyone wants to invest in blockchain. At least, that’s the impression one gets from the daily funding announcements that are eagerly reported by crypto news media. Here are the latest projects attracting capital from the industry’s VC heavyweights.

Get The Full Ray Dalio Series in PDF

Get the entire 10-part series on Ray Dalio in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues

Q1 2021 hedge fund letters, conferences and more

The Future of Debt-Free Liquidity Provision

Unbound Finance is a defi treasury for liquidity pool tokens that recently garnered $5.8 million from the likes of Pantera Capital, CMS Holdings, Hashed, TRGC, LedgerPrime, and Arrington XRP Capital.

A gateway to instant crypto credit lines and high-yield earning opportunities, Unbound enables users to collateralize LPT at 0% to borrow other crypto-assets, with no deadline imposed on the loan repayment. It manages this by leveraging the idle liquidity from the wallets of AMM liquidity providers on platforms like Uniswap, Sushiswap and Balancer.

Because there is no liquidation engine, users are also immunized from the risk of being liquidated – an ever-present danger in the hyper-volatile world of yield farming.

As well as that, Unbound is busy creating native bridges to enable cross-chain transfers of its AMM-native stablecoin and other synthetic assets.

“Unbound has great potential to play a lead role in the defi space by focusing on liquidity pool tokens,” said Pantera Capital CEO Dan Morehead. “We’re excited to support the Unbound team as they build the key tools to capitalize upon this untouched part of the defi ecosystem.”

As well as attracting capital from several heavy-hitting funds, Unbound accepted investment from multiple angels including the founders of Enjin, Gnosis, Polygon (formerly Matic), Polkastarter and Kyber Network.

Whether bootstrapping experimental networks or financing cutting-edge defi treasuries, investors – both crypto-native and the VC funds dipping their toes in for the first time – are embarking on a spending spree and powering a slew of audacious new products and protocols. For the sake of users and the industry at large, let’s hope the recipients spend the capital wisely.

Pontem Network Aims to Seize the Diem

Described as an experimental network for Facebook’s Diem blockchain (formerly known as Libra), Pontem Network is a Substrate-based chain that seeks to help the social media giant achieve its goals. How? By introducing creators to Diem’s potential and giving them the chance to validate ideas before submitting them directly to the Diem Association.

Pontem Network utilizes cross-chain bridges to connect to external blockchains like Polkadot, EOS, and Ethereum and tap into their resources. The Diem testnet also features a range of tools and ready-made modules that are easily migratable to Facebook’s upcoming permissioned blockchain.

Because it functions as a parathread of Polkadot, Pontem can tap into the liquidity, data, and user base of the sharded blockchain created by Ethereum co-founder Gavin Wood. Earlier this month the decentralized application (dApp) attracted $4.5 million in seed investment from over 30 high-profile investors including Kenetic Capital, Alameda Ventures, Mechanism Capital, Delphi Ventures, Spartan Capital, and NFT platform Animoca Brands.

Co-founder Boris Povod hailed the news, saying he was “humbled and honored to have such an esteemed roster of investors supporting our vision for Pontem and helping to make it a reality.”

It is tough to overstate how consequential a project Pontem Network could prove to be. While Facebook’s blockchain project tends to divide opinion, Pontem represents a decentralized testing ground and framework for what could well prove to be the most widely-adopted blockchain in the world. Last month, the Diem Association – which includes 26 financial firms and non-profits – announced that it plans to launch a U.S. dollar stablecoin for use by consumers and businesses in its blockchain-based payment system.

Pontem Network intends to use its war chest to scale up the project and onboard new talent.

Smart Contract Auditor Set to Level Up Systems

Security auditor Runtime Verification is celebrating after raising $5.3 million from its latest funding round. The company, which turned ten last year, conducts security audits on smart contracts and virtual machines while also offering bespoke blockchain advisory services.

Unlike the aforementioned projects, Runtime Verification doesn’t exclusively operate in the blockchain arena: it also assesses the computer systems for companies in the automotive and aerospace industries, having worked with the likes of NASA and Toyota.

The latest funding round, however, was very much about blockchain. Led by early-stage venture firm IOSG Ventures, it attracted investment from the Polkadot-focused firm Hypersphere Ventures, as well as the Tezos Foundation, Algorand accelerator Borderless Capital, Cardano’s cFund and Elrond Research.

According to a Runtime Verification blog post, the seven-figure sum will be used to “accelerate the development of tooling intended to enhance the safety, reliability, and correctness of computing systems for blockchain and embedded systems, as well as to expand Runtime Verification’s global presence.”

Combining the Best of Cefi and Defi

A decentralized, order book-based exchange (DEX) built on the fast-growing Polkadot blockchain, Polkadex aims to simplify crypto trading by combining the best aspects of both cefi and defi. Currently in testnet, it’s destined for a mainnet launch later in the year.

Back in March, the project generated a ton of hype among venture capitalists, almost two dozen of whom pledged funds to help the team achieve its lofty ambitions. Participants included many familiar names, from Kenetic Capital and NGC Ventures to CMS Holdings, Genesis Block Ventures, and Waterdrip Capital, with a total of $3 million raised.

Notable for features like perpetual liquidity mining and fee-less transactions, Polkadex even decentralizes the KYC process, paving the way for traditional institutional players to enter defi. By tackling slippage and front-running, and combining high throughput (500,000 tps) with low latency and slick design, Polkadex could well be the next-generation DEX the industry’s been waiting for.

Putting Blockchain Under the Microscope

Data is as intrinsic to blockchain as water is to life. It’s no surprise, then, that blockchain data monitoring platform PARSIQ has been such a runaway success. Not only does its native PRQ token have a market cap of over $66 million, but the platform raised $3 million earlier this month in a round led by the Solana Foundation and Axia8 Ventures.

“We are excited to have received the support of this diverse and highly regarded set of crypto ecosystem participants,” said PARSIQ CEO Tom Tirman.

“While our runway was more than sufficient from our earlier raise, we felt that to guarantee the success of our project, we needed additional support from major players. With their help, we will be able to mount the strongest marketing and development push for PARSIQ yet.”

PARSIQ intends to work with its new investors on developing products and fine-tuning market strategies, and in particular it will forge closer ties with Solana by bringing its Smart-Triggers to that blockchain’s ecosystem projects. Smart Triggers, to the uninitiated, are essentially work flows which are executed when a particular blockchain activity transpires under certain conditions.

The suite of tools offered by PARSIQ are designed to be used by developers, researchers, market analysts and compliance officers, all of whom could benefit from improved clarity about network application performance. As well as Solana, PARSIQ’s tools are compatible with Bitcoin, Ethereum and Algorand.

A Decentralized Alternative to AWS

PARSIQ isn’t the only firm dedicated to data; Norwegian startup IAGON is another. This month, the platform raised $3.4 million in seed and private funding from a panoply of VC funds, all of whom bought in based on its vision of decentralized Big Data.

Ostensibly, IAGON is creating a scalable cloud platform for leveraging the storage and processing power of a decentralized computer grid, coordinated over a blockchain network. An “affordable, accessible and private cloud that belongs to no-one and everyone – just like air and water,” to quote the team itself.

IAGON won investment from the likes of Blockchain Israel, LedgerLink Labs, AU21 Capital and Alphabit, with a handful of angel investors boarding the bandwagon too – not least ex-Cardano advisor Darren Camas.

“We’re excited to have received the support of such a wide network of investors in the crypto ecosystem, with a particular focus on Cardano,” said Navjit Dhaliwal, co-founder of IAGON.

“With the support of the crypto community, both institutional and grassroots, we are poised to become the decentralized alternative to AWS and all other Big Tech cloud infrastructures.”

KIRA Wants to Make it Rain for Yield Chasers

There seems to be a trend for crypto startups branding in all caps and promptly closing seed rounds from blockchain VCs. Correlation does not equal causation, of course, and thus there are more compelling reasons as to why PARSIQ, IAGON, and KIRA have all closed multi-million dollar rounds.

The latter is creating a network that lies at the heart of web3, powering an array of decentralized systems while unlocking the capital that is usually tied up through staking. Founded by Milana Valmont, fintech startup KIRA, promises to make it easier for yield farmers to generate greater profits by unlocking the value that would otherwise lie off-limits in staked assets.

The startup’s vision has clearly resonated with investors, who stumped up $5 million last year to claim a slice of what KIRA’s team is cooking. Black Edge Capital, Ascensive Asset Management, and TRG Capital are among the firms who participated.

As Roger Lim, Founding Partner at NGC Ventures, explains: “KIRA is a brilliant team of people that is working on enabling full access to the underlying value of any digital asset. They are creating a true decentralized fintech solution that allows trustless and scalable market access. This will revolutionize decentralized finance as KIRA will become a powerhouse of a web3 economy. We want to be a part of their journey.”

And there you have it: seven projects, suited and bootstrapped and hell-bent on making a splash in the blockchain world. With a small army of experienced investors backing them, their odds look pretty good from our perspective.

Signup to ValueWalk!

Get the latest posts on what's happening in the hedge fund and investing world sent straight to your inbox! 
This is information you won't get anywhere else!