Tag: Venture-Capital

OPNX Reveals Venture Capital Backers

by Blockchain News

OPNX, a new exchange founded jointly by members of the Three Arrows Capital (3AC) and Coinflex teams, has revealed the venture capital firms that are backing the project. The announcement came in the form of a video posted by the company on April 21, in which CEO Leslie Lamb thanked some of the major backers of the project, including AppWorks, Susquehanna (SIG), DRW, MIAX Group, China Merchant Bank International, and Token Bay Capital.

Despite the announcement, OPNX has faced criticism in the crypto community due to its association with the bankrupt 3AC hedge fund. Some firms have claimed they may refuse to associate with anyone who helps fund the new exchange. However, the company behind the project has defended itself, arguing that it will help make customers of failed crypto ventures whole again.

According to early fundraising documents, OPNX will allow traders to buy and sell claims against bankrupt firms such as 3AC and FTX. The exchange aims to create a secondary market for these claims, allowing investors to potentially profit from them.

The backers of OPNX have previously funded various tech and financial projects. For example, SIG was one of the early backers of TikTok, and MIAX Group owns a U.S.-regulated equities and options exchange. AppWorks is also listed on Crunchbase as a partial owner of Uber.

However, at least one of the firms mentioned in the video has denied funding the project. DeFi trading firm Nascent stated that it bought Coinflex tokens issued by the company’s previous incarnation but did not participate in a funding round for OPNX.

Three Arrows Capital was a crypto hedge fund founded in 2012. In June, it was issued a notice of default by Voyager Digital after allegedly failing to pay 15,250 Bitcoin (BTC) and 350 million USD Coin (USDC) that had been loaned to it. The hedge fund filed for bankruptcy on July 1, and some creditors have accused the founders of being “on the run” or hiding from the bankruptcy court.

Despite these controversies, OPNX seems determined to move forward with its plans. By creating a secondary market for claims against bankrupt firms, the exchange aims to provide a new avenue for investors to potentially profit from these types of investments. However, it remains to be seen how successful the venture will be, especially given the backlash it has received from some corners of the crypto community.

Overall, the emergence of OPNX highlights the growing interest in crypto-related investment opportunities, as well as the potential risks and rewards of these types of investments. As the crypto market continues to evolve, it is likely that we will see more projects like OPNX emerge, each with their own unique opportunities and challenges.

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Web3 Startup Funding Drops 82 percents YoY

by Blockchain News

According to recent data from Crunchbase, venture capital (VC) funding for Web3 startups dropped significantly by 82% YoY in Q1 2023, declining from $9.1 billion to $1.7 billion. This significant decline in funding is attributed to investors adopting a risk-off approach over the past few months by seeking out opportunities in industries they know best, such as cybersecurity or SaaS. The number of deals between VCs and Web3 startups also saw a decline of roughly 33%. The report from Crunchbase News highlights that this $1.7 billion figure for Q1 2023 marks the lowest amount of Web3 start-up funding since Q4 2020, a time in which many people had never heard of Web3.

Web3 startups are defined as early-stage companies that are either working directly with crypto or blockchain tech (or both). The report also emphasized that the number of big Web3 start-up funding rounds hitting nine figures almost completely dried up over the past year. In Q1 2022, VC-backed startups raised 29 rounds of more than $100 million, including massive raises of $400 million or more by ConsenSys and Polygon Technology, as well as FTX and its U.S. affiliate FTX US. However, the most recently completed quarter saw only two rounds hit the nine-figure mark, as VCs have hit the brakes on spending big in the space.

Although the interest in Web3 start-ups has cooled off in recent times, the report from Crunchbase also acknowledges that venture funding is down in almost every sector. The decline in Web3 funding is attributed to investors opting for a risk-off approach over the past few months by seeking out opportunities in industries they know best, such as cybersecurity or SaaS.

The decline in Web3 startup funding is also attributed to the dramatic collapse of FTX and several other crypto lenders, as well as banking issues that rattled the economy in general. However, there are some positive signs as highlighted by the report, such as the significant price rallies of Bitcoin (BTC) and Ether (ETH) since the start of the year. Whether this is enough to bring more venture dollars back to the space, only time will tell.

In a different report published by Galaxy Research on April 11, the firm looked at the broader amount of VC investment into all crypto companies over the past 12 months. In a similar vein to the recent trend in Web3 funding, the report indicated that the $2.4 billion invested into all crypto firms in Q1 2023 marked an 80% decline from the $13 billion recorded in Q1 2022. Notably however, while capital investment plummeted significantly YoY, the report showed that the number of VC crypto deals had increased by around 20% in Q1 2023 compared to Q4 2022.

The head of firm-wide research at Galaxy, Alex Thorn, stated that historically, venture activity has tracked crypto asset prices pretty closely. Therefore, it will be interesting to see if crypto VC activity can rebound if prices remain resilient or constructive this year, despite the many macro and monetary headwinds.

In conclusion, the decline in Web3 startup funding is a significant concern for the industry. However, there are positive signs as highlighted by the report, such as the significant price rallies of Bitcoin (BTC) and Ether (ETH) since the start of the year. The rise in crypto asset prices could encourage more investment in Web3 startups in the future, especially if investors believe in the potential of these companies to disrupt traditional industries.

It’s worth noting that Web3 technology is still in its infancy, and many companies are still trying to figure out how to apply this technology to real-world use cases. As such, there is a certain level of risk involved in investing in Web3 startups, and many investors may be hesitant to take on that risk, especially given the current economic climate.

Furthermore, the decline in Web3 funding is not limited to this sector alone, as venture funding is down in almost every industry. The decline in VC investment is attributed to various factors such as inflation, supply chain disruptions, and global economic uncertainty. This has led many investors to be cautious with their investments, especially when it comes to early-stage companies.

Despite the challenges, there are still many reasons to be optimistic about the future of Web3 technology. The potential use cases for blockchain technology are vast and varied, ranging from supply chain management to digital identity verification, and many companies are working on innovative solutions to address these issues.

Moreover, the rise of decentralized finance (DeFi) has demonstrated the potential of blockchain technology to revolutionize the financial industry. As more people become aware of the benefits of DeFi and Web3 technology, it’s possible that we may see a resurgence in VC investment in this space in the coming years.

In conclusion, the decline in Web3 startup funding is undoubtedly a cause for concern, but it’s important to remember that this technology is still in its early stages. As the industry matures and more companies develop innovative solutions, we may see a renewed interest in Web3 startups from investors. Furthermore, the rise of DeFi and the increasing mainstream acceptance of cryptocurrencies could lead to a resurgence in VC investment in the Web3 space in the future.

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2022 was a tough year for crypto with a decline in venture

by Blockchain News

The year 2022 will go down in history as a challenging one for cryptocurrencies, as the gloomy market circumstances were reflected by a decrease in the amount of venture capital (VC) financing pouring into the blockchain and cryptocurrency industries.

A analysis by Blockdata reveals that there would be consistent decreases in financing on a quarterly basis through the year 2022. This comes after a period of growing venture capital investing into the larger Web3 field through 2021.

Blockdata closed out the final quarter of 2022’s analysis of the value of venture capital financing by noting a 34% decrease from the previous quarter’s total. The data was obtained from CB Insights. When compared to the first and second quarters of the year, the third quarter’s results were much worse, falling by 67% and 53%, respectively.

After reaching a record high of $11 billion in investments and 692 agreements in the first four months of 2022, the ensuing decline in venture capital investment occurred quarterly after that point.

Blockdata identifies a number of reasons for the decrease in venture capital financing for cryptocurrency and blockchain-related projects in 2017. The collapse of the Terra ecosystem, which cost $60 billion and occurred in May 2022, is noted as a trigger event that led to the eventual insolvency of bitcoin lending businesses Three Arrows Capital and Celsius.

The implosion of FTX in November 2022 contributed further to the volatility that permeated throughout the space, while the global macro conditions in capital markets, which were affected by rising interest rates and inflation, also played a role in the decline of investments made by venture capitalists.

As a direct consequence of this, venture capitalists only contributed $3.7 billion to financing during the fourth quarter of 2022. This is a 61% decrease compared to the $9.6 billion that was contributed during the same period in 2021. The overall capital received by blockchain and cryptocurrency firms fell by 11% annually, from $32 billion to $29 billion, bringing the total to $29 billion.

A good conclusion that Blockdata notes is the fact that the number of trades in 2022 is expected to increase by 35% compared to 2021. According to the company, there has been a slowdown in venture capital expenditure, but investors are still eager to fund blockchain-based technology, apps, and businesses. This is despite the fact that venture capital spending has been on the down.

According to the findings of the research, investments in venture capital are gradually moving toward “non-volatile ideas.” These innovations include cross-chain bridges, payments and remittances, loans, decentralized autonomous organizations, asset management, and digital identity management.

The fourth quarter saw a number of significant venture capital investments. Amber Group was successful in obtaining the most money, bringing in $300 million during a Series C round in December 2022. This was done in order to combat drawdowns of certain goods that were impacted by the FTX scandal.

During the fourth quarter, there were a total of nine “blockchain mega-rounds,” each of which resulted in the receiving of more than $100 million in investment. Only Uniswap and Celestia, with respective market values of $1.7 billion and $1 billion, were able to achieve the coveted “unicorn” designation during the fourth quarter of the previous year.

Due to their participation in thirteen separate fundraising rounds for blockchain and cryptocurrency businesses, Coinbase Ventures has been recognized as one of the most active corporate venture capital investors until 2022.

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Alexis Ohanian bought 50000 ETH

by Blockchain News

According to reports, Alexis Ohanian, one of the co-founders of the social media website Reddit, purchased 50,000 Ether (ETH) coins during the presale of the cryptocurrency in 2014 for only $15,000, which works out to a price of about 30 cents per coin.

Ohanian, who had left the social media giant in 2020, stated in an interview with Forbes on February 21 that he found the concept of a decentralized store of value to be very appealing, in part due to his Armenian heritage. This led him to take an early gamble on Ethereum. Ohanian left the social media giant in 2020.

“Any group of people who have in their consciousness or in their collective history some idea of persecution, especially by a state, makes the idea of a store of value that is not controlled by any one state very attractive.” [Citation needed] “Any group of people who have in their consciousness or in their collective history some idea of persecution, especially by a state.” And so, in some respects it was ingrained in me at the time, and this made me open to the concept of a decentralized currency in a manner.

According to CoinMarketCap, the value of this investment has skyrocketed to an astounding $82.5 million at today’s rates, marking a growth of 549,589% from its initial value.

He went on to describe how Turkish forces had taken the ancestral carpets that had been passed down through his family during the Armenian genocide that occurred during World War I. This is what sparked his interest in “unseizable property.”

Ohanian is a strong supporter of self-custody, perhaps as a result of his distaste to having his property seized. He keeps some of his most valuable crypto-related assets off exchanges, which makes them less susceptible to the prying eyes of governments. He is in charge of managing the secret keys to these investments.

Ohanian said that he recognized the possibility for developers to construct a broad variety of possibly unseizable assets on top of Ethereum when he first heard about it during a meeting with the cryptocurrency exchange Coinbase. Some examples of these types of assets include nonfungible tokens (NFTs).

As a direct consequence of this, he made his first investment in Ether; nevertheless, he later said in an interview that “in retrospect, I didn’t invest nearly as much as I should have.”

Ohanian used the money he made from his early investments in Ether and Coinbase to launch his own venture capital company, which he called 776, in the year 2020. The company has financial stakes in 29 cryptocurrency-related firms, and in February 2022, it successfully secured $500 million to fund more investments of a similar kind.

Following Ohanian’s line of thinking that investors may take advantage of the opportunity to purchase assets at lower prices during a bear market, the company has seen the most recent market slump as the ideal moment to place long-term bets on the cryptocurrency business.

The company now has more than 750 million dollars’ worth of assets under management.

Ohanian made the observation that while cryptocurrencies are incredibly unpredictable, “there are enough of individuals who have the generational awareness of experiencing enormous inflation,” which makes the volatility of cryptocurrencies much more tolerable.

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FTX investors file class-action suit against Sequoia

by Blockchain News

According to reports, users of the now-defunct cryptocurrency exchange FTX have taken aim at financiers who marketed the platform, arguing that their efforts provided a “air of legitimacy” to the now-defunct exchange in a situation that has been described as “tricky” by a cryptocurrency attorney.

According to a story that was published by Bloomberg on February 15th, FTX investors had filed a class-action lawsuit on February 14th against the venture capital company Sequoia Capital as well as the private equity companies Thoma Bravo and Paradigm.

The investors said that the companies were promoting “their own investments” in FTX, which amounted to hundreds of millions of dollars.

It was stated that the companies participated in a promotional marketing campaign in 2021, which the investors said gave the discredited cryptocurrency exchange a “air of credibility.”

The three companies were all investors in FTX’s $900 million Series B round, which took place in July 2021. This was the biggest raise in the history of cryptocurrency, and individual partners at each of the three companies spoke favorably of former FTX CEO Sam Bankman-Fried at the event.

Matt Huang, one of the co-founders of Paradigm, issued a statement in the wake of the fundraising announcement in July 2021, in which he referred to Bankman-Fried as a “unique” entrepreneur who is “stunningly ambitious.”

He went on to say that despite the fact that Sequoia did not do its due diligence to a particularly high standard, the company is not “liable to others.”

The fact that there is no evidence to imply that Sequoia wasn’t “playing within the regulatory guidelines” led Hennessy to assume that it was a matter of “buyer beware.”

According to a separate report published by Bloomberg on February 15, it was revealed that in the same court filing, Sam Bankman-Fried and his father, along with former executives of FTX and Alameda Research named Caroline Ellison, Nishad Singh, and Gary Wang, were all served with a subpoena, which is an order compelling a person to appear in court in order to provide additional evidence.

It was said that Sam Bankman-Fried is likely to show up in court on February 17, while Joseph Bankman, Ellison, Wang, and Singh are scheduled to appear in court on February 16.

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A group of nine banks has invested $45 million in Carbonplace

by Blockchain News

According to a news statement that was issued on February 8th, the blockchain-based carbon credit transaction network Carbonplace was successful in raising $45 million in an investment round from its nine founding banks, which together oversee $9 trillion in assets. The following financial institutions make up the banking system: BBVA, BNP Paribas, CIBC, Ita Unibanco, National Australia Bank, NatWest, Standard Chartered, SMBC, and UBS. The financial technology company headquartered in London has also made the announcement that it would transition into an independent business under the leadership of its newly appointed CEO, Scott Eaton.

According to Carbonplace, the company plans to use the investment to strengthen its platform and workforce. This will enable the company to scale its services to a larger client base consisting of financial institutions and seek partnerships with other market players involved in the carbon market, such as registries and stock exchanges around the world. Carbonplace has been called the “SWIFT [Society for Worldwide Interbank Financial Telecommunications] of carbon markets” because it will enable participants to share carbon data in real time. This will ensure a secure and traceable settlement of transactions. Carbonplace has been described as the “SWIFT [Society for Worldwide Interbank Financial Telecommunications] of carbon markets.”

Robert Begbie, CEO of NatWest Markets, commented on the news by citing research from McKinsey which showed that “global demand for voluntary carbon credits is anticipated to expand by a factor of 15 in the next few years.” He said that Carbonplace is in a unique position to address that need since the company offers scalable technology to organizations who are concerned about the environment.

Carbonplace has already conducted test transactions with a number of different organizations, including Visa and Climate Impact X, ahead of the anticipated debut of the service later on in this year. Carbonplace employs its own distributed ledger technology to conduct offset transactions. The company has praised digital wallets as a tool that “enables owners to accurately establish ownership to the market, therefore lowering the dangers of double counting and simplifying reporting.”

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Venture capital firm Andreessen Horowitz voted against a Uniswap proposal

by Blockchain News

Andreessen Horowitz (a16z), a venture capital company, allegedly engaged in a vote that was cast against a final proposal to instal Uniswap v3 on the BNB Chain by making use of the Wormhole bridge, as stated by the Uniswap DAO forum. This information was taken from the forum where it was posted.

On February 2, 0xPlasma Labs submitted a governance request on behalf of the Uniswap Community asking for permission to deploy the most current version of Uniswap on the BNB Chain. This request was made by 0xPlasma Labs. During the preliminary vote on the proposal, there were 20 million votes cast in favour of it, which is equivalent to 80.28 percent of the total, and 4.9 million votes were against it (19.72 percent of the total). On February 5th, the venture capital business used its 15 million UNI holding to cast a vote against the resolution. This action was taken in opposition to the move. The motion that was made was in direct opposition to the action that was executed.

Although there had been a total of 23.4 million votes cast previous to the publishing of this article, just 3% of all UNI tokens had engaged in the voting process at that point in time. This was despite the fact that there had been a total of 23.4 million votes cast. According to the schedule, the final day that voters will be able to cast their votes will be on February 10th. This day marks the end of the voting period.

The disagreement stems from the fact that a cross-chain bridge wasn’t properly planned for before the deployment was carried out, which is the primary source of the problem. The Wormhole bridge is used inside the framework of the proposal, and a16z offers support for the incorporation of LayerZero as the interoperability protocol. In the paragraphs that follow, consideration will be given to each of these facets in more depth.

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Injective Launches $150 Million Ecosystem

by Blockchain News

Layer-1 blockchain technology Injective, which was established in 2018, has announced the introduction of a $150 million ecosystem fund to help developers that are developing on the Cosmos network.

The so-called ecosystem group is supported financially by a large consortium of venture capital and Web3 companies. These companies include Pantera Capital, Kraken Ventures, Jump Crypto, Kucoin Ventures, Delphi Labs, IDG Capital, Gate Labs, and Flow Traders.

According to Injective, the consortium has amassed the most members out of all those that have been formed inside the greater Cosmos ecosystem.

According to Injective, developers who are chosen for the fund will get help in the form of “bespoke token and equity investments”, in addition to mentoring, technical assistance, business growth, and marketing.

The greatest attention will be given to projects that are developing decentralised financial infrastructure (DeFI) and interoperability infrastructure.

The construction of trading platforms, scalability solutions, and proof-of-stake infrastructure are all initiatives that will benefit from the allocation of these funds “

In terms of stage, the organisation is generally interested in early-stage enterprises (seed to Series B), but it is open to the possibility of considering follow-on investment on an individual basis as well.

The amount of financing that is granted to each project will vary according to the stage it is currently in and the requirements it must meet in order to achieve the overall aim of ensuring that each project is successful.”

Injective is a decentralised smart contracts platform that was constructed using the Cosmos SDK, which is a development kit that encourages speedier and more cost-effective infrastructure than Ethereum. Injective is also known as the Injective Protocol.

According to Chen, in comparison to other blockchains, Cosmos has more adaptability, opportunities for customisation, and horizontal scalability.

According to CoinMarketCap, Cosmos is the 20th biggest blockchain network due to its market value of over $3.7 billion.

The term “decentralised finance” first appeared in public discourse in the summer of 2020, at the same time when a number of noteworthy projects initiated a bull market in cryptocurrencies not long after Bitcoin’s quadrennial halving.

Even though decentralised finance (DeFi) activity has slowed down over the course of the last year, the industry as a whole has been mostly immune to the problems that have been afflicting centralised finance (CeFi) platforms.

According to Chen’s additional explanation, “the decentralised structure of DeFi protocols provides for better transparency and actual control over assets,” which will always be a fundamental benefit over centralised finance.

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QuickNode Closes $60 Million Funding Round

by Blockchain News

A fundraising round with a total value of sixty million dollars has been successfully completed by the distributed ledger technology (Blockchain) development platform QuickNode. This achievement is a component of a worldwide expansion that is being undertaken with the goal of luring a greater number of users and developers onto the Web3 platform. This accomplishment was made feasible as a direct consequence of the efforts that QuickNode put out in order to entice a higher number of users and developers to participate in the Web3 platform. On the 24th of January, the company made the news that the venture capital firm 10T Fund will be leading the Series B fund raising effort, with participation from Tiger Global, Seven Seven Six, and QED. That fact is common knowledge at this point. As a direct result of the fact that the investment was successfully completed, the value of QuickNode has been increased to an estimated $800 million.

QuickNode’s management has said that the cash will be used to accelerate the company’s expansion into new markets across the globe and will make the transition to Web3 more straightforward “at scale.

” If this is to be achieved, it is vital to provide developers with the deployability that is required in order to sign up more blockchain clients.

The Series B funding round has been the most crucial financing round for the business since October 2021, when the firm was only seven months old and received $35 million in its first investment round. Since that time, the company has been in operation.

QuickNode asserts that the size of its existing user base has more than doubled in size throughout the period of time that has passed between the company’s two previous rounds of venture investment.

At the present, the company provides its infrastructure services to over 16 distinct blockchains, some of which are Ethereum, Matic, Optimism, Arbitrum, and Solana. Other blockchains that currently make use of the company’s offerings include Solana is one of the blockchains that is featured among the others. There are a number of other blockchains in addition to these that utilise a selection of these services in their operations.

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Former FTX US Head Launches New Crypto Software

by Blockchain News

According to Bloomberg, the former CEO of FTX US is creating a new bitcoin software firm and has already secured $5 million from different investors. Coinbase Ventures and Circle Ventures have provided funding for a new software company that will be founded by Brett Harrison, who formerly held the position of president of FTX US from May 2021 to September 2022.

Shari Glazer of Kalos Labs and Anthony Scaramucci were two of the individuals that joined in the seed round with SALT Fund, Motivate VC, P2P Validator, and Third Kind Venture Capital.

His new company, which will be known as Architect, will provide trading software for huge institutions who are interested in accessing the cryptocurrency markets.

He expressed to Bloomberg his optimism that “people would be able to recover their trust back in trading in this business” with the release of Architect.

Harrison left FTX US months before the company collapsed under the shoddy guidance of Sam Bankman-Fried, who headed the global FTX cryptocurrency exchange and several other companies under its purview. Harrison left FTX US because he was unhappy with the direction the company was being led in by Bankman-Fried.

In November, FTX US was one of around 130 firms that were a part of the FTX Group that filed for bankruptcy.

1/49 A lot of people have inquired about my tenure at FTX US and the reasons for my departure at the time that I did.

As I said earlier in the week, I’m excited to start sharing my experiences as well as my point of view with the public.

— Brett Harrison (@BrettHarrison88) The 14th of January, 2023 On January 14, Harrison detailed the reasons for his departure from the cryptocurrency exchange in a long discussion on Twitter.

He claimed that six months into his tenure, “cracks began to form” in his relationship with Bankman-Fried, and that the former CEO of FTX displayed “total insecurity and intransigence” whenever he was confronted with conflict. He stated that this behaviour occurred whenever he was put in a position of authority.

Among other alleged transgressions, Bankman-Fried is facing eight criminal accusations and may spend as much as 115 years in jail for allegedly scamming investors and breaking regulations pertaining to political funding.

On January 5, he entered a plea of not guilty to all of the charges.

As the bear market continued to wreak havoc on the cryptocurrency industry in the second half of 2022, venture capital funding started to dry up.

As cryptocurrency markets adjust to the new reality, the failure of FTX and the subsequent ripple effects it caused seem to have added further strain to the process of raising cash.

According to Bloomberg, Harrison’s first goal for Architect was to fund anywhere from $5 million to $10 million at a value of $100 million.

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