By Zen, PANews
In the first half of last year, when the secondary market in the encryption industry continued to decline, there was still a large amount of funds waiting for opportunities in the primary market. During this period, venture capital funds with a scale of hundreds of millions of dollars abounded, becoming the source of growth in the encryption market. Among them, "dao5", an encryption venture capital fund established by former Polychain Capital general partner Tekin Salimi in February last year, announced that it had raised $125 million at the end of the following month.
According to the official introduction, dao5 focuses on the first layer of blockchain infrastructure, privacy technology, DeFi, DAO, games, NFT and Web3 social platforms, and provides about $500,000 to $2 million for pre-seed and seed round financing. Different from other venture capitals, in addition to seeking to invest in projects in various fields of cryptocurrency and provide early support, dao5 also plans to acquire talents and capital through venture financing, so as to eventually transform into a shared and co-governed project by investors and project founders The DAO.
Transformation from Corporate Lawyer to Web3 Venture Capital
Tekin Salimi started his career as a corporate lawyer at Torys LLP, a leading Canadian commercial law firm, specializing in mergers and acquisitions, debt financing and securities law. At that time, he was already an avid encryption enthusiast. He often conducted blockchain/Web 3 research in his spare time, and published his own research articles on social media, Cointelegraph and other platforms. In early 2018, he started "All inWeb3" and joined Polychain Capital, a well-known encryption investment fund, as a general partner. The fund was founded in 2016 by Olaf Carlson-Wee, the first employee of Coinbase, and received investments from Andreessen Horowitz, Sequoia Capital, etc. in the early stage.
In February 2022, tekin salimi left Polychain Capital, founded the experimental cryptocurrency investment fund DAO5, and soon raised $125 million from cryptocurrency native investors, dedicated to the financing of seed and pre-seed startups . DAO5 advisors include Ava Labs founder Emin Gün Sirer, Espresso Systems founder Ben Fisch, Moonpay founder Ivan Soto-Wright and other well-known figures or investors in the encryption industry. Do Kwon, who was known as the "genius" in South Korea at the time, was also included in this list, and the appalling collapse of TerraUSD and Luna occurred shortly afterwards.
The goal is to complete the DAO transformation in 2025
Tekin Salimi plans to eventually develop dao5 into a decentralized autonomous organization. At present, the plan is still in the early stage and will not be implemented until about 2025. Subsequent management, operation, investment and other matters will be completely determined by the governance of dao5 token holders, and each contributor who submits a successful investment proposal to the future DAO will receive corresponding rewards in the economic growth of the project. The 3-year transition period is to provide enough time to create a suitable token economics and governance model for the DAO, thereby increasing participation and ensuring simplified incentives.
According to the plan, the tokens minted by dao5 will be minted and issued to the fund’s investment team, advisory board and founders of portfolio companies, so that they can all directly share the benefits obtained by dao5. This granting of tokens for the collective benefit will ensure that project founders will be incentivized and enhance economic ties and partnerships between projects in the dao5 portfolio. This cooperation model will not only serve as a form of risk diversification, but also provide value for projects under dao5.
Focus on infrastructure investment
According to incomplete statistics from PANews, dao5, which has been established for a year and a half, does not make a lot of shots. It has participated in the early financing of 14 encryption projects. Judging from the invested projects, it focuses on the DeFi and infrastructure tracks, and pays attention to data, privacy, social and other fields. In addition, 5 investments including Layer1 public chain Berachain and Web3 infrastructure startup Polyhedra Network were led by Polychain Capital, Salimi's former owner.
The following is a brief introduction of dao5 investment projects (if dao5 is a participant in the financing, it will not be listed)
DeFi:
- EigenLayer: A re-staking (Re-staking) protocol built on Ethereum. The team behind it, EigenLabs, raised $14.5 million in seed round financing led by Polychain Capital and Ethereal Ventures. In March of this year, it completed another $5,000 USD 10,000 in Series A financing, led by Blockchain Capital, with participation from Coinbase Ventures and others.
- Tonic: The NEAR ecological DEX agreement, its US$5 million financing was led by Electric Capital and MOVE Capital, and Framework Ventures and market makers GSR, Wintermute, Flow Traders, etc. participated in the investment. Tonic is building a decentralized protocol for fast and seamless trading of any asset on NEAR and Aurora.
- AlloyX: DeFi protocol, its $2 million pre-seed round of financing was led by Hack VC, with participation from Circle Ventures and others. AlloyX’s vault combines Credix Finance’s over-collateralized tokenized credit (digital tokens backed by real-world assets such as loans or debt instruments) with smart contracts that tokenize U.S. Treasury bills to provide real-world asset Liquidity for DeFi investors sexual opportunity.
- Block Green: A lending protocol designed to enable Bitcoin staking, raised $3.7 million in a seed round led by Peter Thiel's Founders Fund, with participation from Coinbase Ventures and others. Block Green allows Bitcoin miners to use their future Bitcoin production as collateral by borrowing their hash power.
Infrastructure & Tools
- Berachain : Layer1 public chain, raised $42 million in private token financing led by Polychain Capital, with participation from OKX Ventures and Shima Capital. The Berachain network is built on the Cosmos SDK and will be compatible with the EVM. Berachain is currently available as a development network (devnet), with a Mainnet release likely later this year.
- Story Protocol : Web3 start-up company, raised $29.3 million in seed round financing led by a16z Crypto, participating investors include Hashed, Samsung Next Fund, etc. The Story Protocol provides a way to create, manage and license intellectual property on-chain, and forms a story LEGO ecosystem that can be remixed and combined, enabling creators to create stories with ownership and incentives.
- Lens Protocol : Web3 social graph protocol, completed $15 million in financing led by IDEO CoLab Ventures, Blockchain Capital, Uniswap CEO Hayden Adams, Polygon co-founder Sandeep Nailwal and others participated in the investment. Built by AAVE, the protocol allows users to lend and borrow crypto tokens to each other, among other things.
- SPACE ID : Decentralized domain name protocol, completed a strategic financing of US$10 million led by Polychain Capital and dao5. SPACEID has previously completed a seed round of financing led by Binance Labs and launched the BNB domain name service.
- Axelar : Blockchain Interoperability Network, Dragonfly Capital and more than 15 blockchain investors have supported its $60 million ecosystem start-up funding plan to accelerate the development of decentralized exchanges that can replace centralized exchanges optimized applications and protocols.
- Bitquery : A blockchain data company whose $8.5 million seed round was co-led by Binance Labs and dao5, Bitquery provides a suite of software products to parse, index, and store blockchain data in a unified way.
- Sunscreen : A Web3 privacy startup founded by Ravital Solomon and privacy network NuCypher co-founder MacLane Wilkison, its seed round of financing was led by Polychain Capital and raised $4.65 million in funding. Sunscreen hopes to enhance the privacy potential of Web3 with Fully Homomorphic Encryption (FHE) technology, which allows individuals to perform computations on encrypted data without decrypting it.
- Cubist , a provider of Web3 development tools, raised $7 million in a seed round led by Polychain Capital, with participation from Polygon, Amplify Partners, and Axelar.
- Polyhedra Network : A Web3 infrastructure startup, raised $10 million in a round of financing co-led by Binance Labs and Polychain Capital, with participation from Animoca Brands and others. Polyhedra has developed several infrastructure products using zero-knowledge (ZK) proof technology, including the ZK Bridge (zkBridge) solution for sending assets between Web2 and Web3 systems, the ZK Decentralized Identity solution (zkDID), and the scaling solution plan.
- Hyper Oracle : ZK oracle network, raised $3 million in seed round financing co-led by dao5 and Sequoia China Seed Fund, with participation from Foresight Ventures and FutureMoney Group. Hyper Oracle is working with the zkWASM virtual machine to develop new indexing and automation protocols to address blockchain middleware challenges in security, decentralization, computational integrity, and performance.
