A16z, USV invest $10 million in blockchain token trading firm

Baozou Commentary : Digital asset hedge fund Polychain Capital focuses on blockchain asset portfolio management and has received support from multiple investors. Thanks to the development of alternative blockchains such as Ethereum, the price of the fund's native assets has risen dramatically, but the market beneficiaries are mostly companies in the blockchain field, not traditional venture capital companies.

Translation: Annie Xu

A startup that trades blockchain assets has raised $10 million in funding from investors including A16z (Andreessen Horowitz), Boost VC, and USV (Union Square Ventures).

Olaf Carlson-Wee, founder of digital asset hedge fund Polychain Capital, is a veteran Coinbase employee. The company plans to invest in “protocol tokens” or alternative assets such as Bitcoin, which have underlying protocols and tradable assets and can manage access to digital ledgers or applications.

Carlson-Wee describes the fund as giving investors access to an active portfolio of blockchain assets.

Olaf Carlson-Wee

Carlson-Wee cited the success of alternative blockchains such as Ethereum as a catalyst for the fund’s development, as traditional venture capital has been unable to capture the value of native assets despite staggering price increases.

“I think these tokens are important because they directly monetize the protocols of the founders and founding teams of open source projects. We have seen many founders of blockchain networks become wealthy from this.”

Carlson-Wee noted that Polychain would not disclose specific financing details, but also would not use its size to influence market activity.

“I try to make the project more forward-looking, believing that this can become the infrastructure of the future Internet, or that application tokens can subvert major centralized network services.”

To this end, A16z recently made a joint investment with USV, hoping to change the business model of blockchain technology.

In the past, both companies have invested in the centralized e-commerce market OpenBazaar and the information sharing metadata protocol Mediachain.

Reports show that the total amount of ICO financing in 2016 was nearly US$200 million, of which nearly US$150 million was invested in The DAO project.