As leaders like Vitalik and Balaji are pushing for the concept of internet-native countries, more and more builders are joining and expanding this narrative. Recently, the Praxis project, which claims to be the world's first internet-native country, announced that it has raised a staggering $525 million in funding, but at the same time, the previous investment scandal of the investor GEM Digital has cast a shadow over this huge financing.
Announced to raise over $500 million in financing again, to build a technology-driven city
On October 16, Praxis announced that it has raised $525 million in funding, which will be used to accelerate the speed and quality of transactions with governments and landowners to build a technology-driven city.
The investors in this round include Arch Lending, GEM Digital, Manifold Trading, as well as Dan Romero, CEO of Farcaster, Tom Schmidt, partner of Dragonfly, Rob Hadick and Anirudh Pai, CEO of ETHGlobal Kartik Talwar, CEO of Helius Labs Mert, co-founder of Worldcoin Max Novendstern, and data scientist Will Price of Flipside Crypto.
Prior to this, Praxis had also received $4.2 million in seed funding in 2021 from investors including Bedrock Capital, Winklevoss Capital, and Alumni Ventures, as well as $15 million in Series A funding in 2022 from investors including Paradigm, Alameda, Three Arrows Capital, and Robot Ventures.
Praxis was founded in 2021 and is led by 28-year-old co-founder Dryden Brown. According to the official website, Praxis is an internet-native alliance aimed at accelerating technological progress and revitalizing Western civilization, and has over 14,000 Praxians distributed in 84 countries, with the companies founded by these members valued at over $400 billion.
One of Praxis' core goals is to build a brand new city, for three reasons: (1) to unleash the potential of technology and science: by building a city in a talent-dense accelerator area, it can reduce regulatory barriers and drive rapid development in areas such as AI, cryptocurrencies, biotechnology and energy; (2) to create a more courageous and better way of life: through cultural and institutional building; (3) to show the world the possibility of building a great city in the 21st century.
According to a report in The Wall Street Journal, Praxis has not yet determined the specific location of the city, but Latin America and the Mediterranean region are likely candidates, and a decision will be made in the first quarter of 2025. Dryden Brown revealed that the initial plan is to cover about 1,000 acres of land and accommodate 10,000 people.
In addition, the Zaha Hadid architecture firm has provided Praxis with a conceptual plan for the city, combining futurism with classical aesthetics and scalable urban planning, and the development work will be led by former Howard Hughes CEO David Weinreb.
GEM Digital is the lead investor, who has repeatedly defrauded with false financing information
Although the concept of internet-native countries is gaining popularity, Praxis' massive financing is surprising, and the involvement of GEM Digital has also raised doubts about this investment.
"Seeing institutions like BlackRock getting into cryptocurrencies, we designed a crypto-native mechanism to finance large-scale projects using tokenized real-world assets (RWAs), and partnered with the Middle East's largest new city development project, Global Emerging Markets. This financing is also the first application of this drawdown mechanism," Praxis said in the financing statement. This financing mechanism usually means that the borrower can draw down the funds gradually based on project progress or needs, rather than receiving the full amount at once.
In fact, according to a report in The Wall Street Journal, GEM Digital CEO Jonathan Collins revealed that the company contributed $500 million of the funding. In return, Praxis needs to provide GEM with tokens representing future real estate development ownership, which Praxis can only obtain after the tokens are launched. The remaining funds will also be released in stages based on milestones, such as obtaining local government approvals, purchasing construction land, tokenizing land ownership, and starting construction.
In fact, this performance-based investment is a common tactic used by GEM Digital. According to previous reports by PANews and ChainCatcher, "investment commitments" are a common trick used by GEM, with dozens of unknown crypto projects announcing financing news through investment commitments, but in reality it is GEM signing so-called massive investment agreements with junk projects, creating market hype to deceive the media, colluding to dump and profit, and the investment funds may not even be directly paid, but filled by the profits from selling the tokens.
Additionally, the Wall Street Journal report also revealed that Arch Lending will provide the remaining $25 million, so the total investment from these two institutions has already reached $525 million. Does this mean that the other investors are just named and not contributing any money?
Looking at this, Praxis may again be a capital control game by GEM Digital.
Welcome to join the official BlockBeats community:
Telegram subscription group: https://t.me/theblockbeats
Telegram discussion group: https://t.me/BlockBeats_App
Twitter official account: https://twitter.com/BlockBeatsAsia
