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Polychain Leads Blockmesh Developer Spacemesh's $15 Million Fundraise

Blockchain development startup Spacemesh has just raised $15 million in a Series A funding round led by Polychain Capital, the firm announced Wednesday.

The project is taking a novel angle on blockchain tech, working to develop a “blockmesh operating system” using the proof-of-space-time (PoST) consensus protocol. As previously reported, the goal is to be able to run PoST on any computer, while making it resistant to powerful mining chips called application-specific integrated circuits (ASICs).

Polychain joined MetaStable, Paradigm, Coinbase Ventures, Bain Capital, 1kx, Arrington XRP Capital, Danhua Capital, Electric Capital, Collaborative Fund, Jack Herrick and a number of other funds in contributing to the Spacemesh round, according to a press release.

Spacemesh co-founder Tomer Afek said the funds would be dedicated to growing and compensating the development team, as well as for an open-source bounty program to pay voluntary contributors. To that end, the company is now hiring in New York City and Tel Aviv, although applicants do not necessarily need to live in either city to be hired. At present, the team comprises 10 full-time employees.

A testnet is planned for launch by the beginning of 2019, according to the company, with the genesis block expected by the second quarter of next year.

Afek explained:

“We are iterating on the protocols as well as the full node implementation, and [are] only going to release a mainnet and the Spacemesh programmable cryptocurrency once we have done extensive security and critical bugs audits and have published the full Spacemesh protocol and its rigorous and peer-reviewed security proofs.”

PoST is being designed to allow participants to store data on their computer over a period of time. This system would be less energy-intensive than proof-of-work (PoW) algorithms, such as used by the bitcoin protocol, and more accessible than proof-of-stake (PoS) systems, Spacemesh believes.

“PoST is early, thus yet to be proven, but on paper [it] meets criteria [neither] PoW nor PoS can allow for – a low barrier for entry (no bonds) with linearity in rewards, aka fairness. So I think it is a worthy attempt for sure,” Afek said.

Spacemesh raised $3 million in seed funding back in early May.

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Polychain Leads Ether Wallet MyCrypto's $4 Million Fundraise

Ethereum wallet MyCrypto just raised $4 million in its ongoing effort to make its product more user-friendly, the startup announced Thursday.

Led by Polychain Capital, the Series A funding round also saw investments from Boost VC Fund 3 LP, ShapeShift, Ausum Blockchain Fund LP, Mainframe founder Mick Hagen, Coefficient Ventures partner Chance Du, early Dropbox employee Albert Ni and Earn co-founder Lily Liu, according to a press release.

The funds will go toward upgrading MyCrypto’s user experience to help new customers more easily purchase and transact with ethereum, said founder and CEO Taylor Monahan.

Monahan told CoinDesk that one of the biggest issues she sees in the space is the difficulty in actually buying or transacting with cryptocurrencies. To that end, MyCrypto intends to hire developers and designers to target consumers who are beginning to interact with cryptocurrencies for the first time.

She said:

“Right now our team is really all engineers and customer support people and I think we need to build out a team that just advocates for the user more and has a ton of experience in user interface and design. Specifically, I’m looking for experts that don’t have a cryptocurrency background to join the team because their strength is outside the space.”

And part of this push means changing MyCrypto’s target user base, according to Monahan.

“The example to this is the ICO [craze] that took off last year, our user was someone who had ether and wanted to participate in an ICO. That’s our market, that’s the type of person that we targeted back then, that’s the type of person we’re targeting right now and our experience is satisfactory for that user,” she explained.

Going forward, she intends to ask different questions about users.

“When a brand new person comes to our site, what happens, what does the flow look like, what do we recommend they do and how do we really build their confidence up, whether it’s buying cryptocurrency or sending someone some ETH or whatever it is,” she said.

MyCrypto does not have a firm timeline for its development goals yet, but Monahan plans to be ready for the next time interest in cryptocurrency spikes. She pointed at the late 2017 bull run as an example of what that interest might look like, but added that the relatively quiet period in the market has helped in terms of developing a product.

“Right now we’re just building … I think that huge pendulum swing [last year] is why we’re in such a bear market right now, we went way too far … I think that at some point the market is going to realize or see the value that’s being created by all these different products in the space,” she said.

“We are in the perfect position to build this super robust product, we’re large enough that we can build things quickly but we’re small enough that we can pivot quickly, adjust to things quickly,” she concluded.

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Crypto Exchange AirTM Targets Troubled Markets With $7 Million Raise

Peer-to-peer cryptocurrency exchange AirTM has raised $7 million in a Series A funding round.

The Mexico-based startup, which seeks to help individuals conduct transactions and bypass traditional banking services, revealed the news Wednesday, saying it will direct the funds toward growing its reach across various markets in South America. In particular, the firm intends to target residents of nations with troubled economies, according to a press release.

Berlin-based BlueYard Capital led the round, a spokesperson told CoinDesk, though they could not disclose the remaining investors.

AirTM co-founder and CEO Ruben Galindo said in the release that the company would continue to provide digital wallets and access to cryptocurrencies for individuals in the developing world.

According to a statement provided to CoinDesk, AirTM, for example, lets freelancers get paid in dollars directly to their AirTM wallet and then withdraw money as local currency. “This is a much better solution than getting paid in devaluing currencies or via an e-wallet that is not connected to the freelancer’s local bank network,” it continued.

Citing growing “distrust in financial and government institutions in many emerging markets” AirTM said its peer-to-peer exchange is “unique” in allowing users to exchange local fiat currency for AirUSD, its U.S. dollar-denominated token.

The company announced earlier this year that it was working with zcash inventor Zooko Wilcox to support Venezuelan residents conducting transactions with zcash and U.S. dollars rather than the hyperinflated national currency, the bolivar (recently replaced by the sovereign bolivar).

The startup claims to allow Venezuelans to bypass banking services entirely, and provided services to potentially as many as 200,000 citizens at the time of the report. The company indicated that Venezuela was responsible for roughly 60,000 transactions per month as of April 2018.

“In May of 2018, Maduro’s government announced Operation Paper Hands (Manos de Papel) on national television, condemning AirTM and other platforms enabling unlicensed bolivar/dollar exchange,” Wednesday’s release noted.

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Big Investors Deny Involvement In Crypto Miner Bitmain's Pre-IPO Funding

Tencent Holdings and SoftBank Group are both disputing their involvement in a widely reported pre-IPO investment round for Chinese cryptocurrency mining giant Bitmain.

Reports on the firms’ participation in the funding effort first emerged among Chinese media in early August. Soon after, several outlets including CoinDesk, TechCrunch and other media platforms cited the reports in follow-up articles on the mining giant’s anticipated multi-billion dollar initial public offering in Hong Kong.

Yet, both Tencent and Softbank have now confirmed to CoinDesk that they have no connection to the investment deal. 

A spokesperson for Tencent told CoinDesk via email on Thursday that the Hong Kong-listed company is “not involved in this investment” when presented with several online reports claiming they were. “The news is not true,” they added.

Similarly, financial giant SoftBank indicated it, too, had no connection to the Bitmain round.

“Neither the SoftBank Group Corp. nor the SoftBank Vision Fund were in any way involved in the deal,” a spokesperson of SoftBank wrote in an email response last week.

Asked about any previous or subsequent investment interest in the mining giant, the SoftBank representative further replied with “nothing so far.”

Meanwhile, another firm reported to have participated – China International Capital Corporation (CICC), an investment and securities brokerage firm listed in Hong Kong with headquarters in Beijing – did not deny the news after CoinDesk sent multiple enquiries on the issue, eventually telling us on Monday it has “no comment on the issue.”

Based on various Chinese reports that covered the deal, the original source of the claims appears to have come from an IPO-focused blog on the WeChat messaging platform, using an official account named “IPO Zao Zhi Dao.”

The owner, called “Uncle C”on WeChat, first published a report on July 23, saying its “exclusive sources” revealed several potential investors who were likely to participate in the Bitmain funding.

The post listed major names such as Tencent, GIC (a Singapore government-established sovereign wealth fund), the Abu Dhabi Investment Authority and a Canadian pension fund. Tencent said at the time it had “no comment on the report” after the article got widely cited across the Chinese media. 

Yet on August 4, the same blog published a follow-up post that again claimed the exclusive that Bitmain had officially closed its pre-IPO round with $1 billion, valuing the firm at $15 billion, post-deal. In addition, Tencent, Softbank and CICC were reported as participating.

The blogger refused to disclose sources when CoinDesk reached out for information.

Ada Hui contributed reporting.

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Airbnb Co-Founder Backs $22 Million Funding for Crypto Dealer SFOX

A cryptocurrency dealer setting out to provide trading services for institutional investors has closed a Series A funding round of $22.7 million.

Called SFOX, the platform announced on Thursday that its new equity financing was led by Tribe Capital and Social Capital, and has backing from Airbnb co-founder Nathan Blecharczyk, Y Combinator, Danhua Venture Capital, Digital Currency Group and more.

Founded in 2014, SFOX operates as a trading hub for institutional investors, high-net-worth individuals and family offices. The firm helps these high volume traders fulfill their buy and sell orders by executing them through its integrations with different cryptocurrency exchanges.

SFOX aims to minimize the impact of high volume trading on the cryptocurrency market, while boosting trading liquidity – “one of the most significant barriers to institutional cryptocurrency adoption,” according to Arjun Sethi, co-founder and partner at Tribe Capital.

SFOX claims in the announcement that it has facilitated over $9 billion in transaction volume so far, and reports a 12-fold growth in client numbers already this year.

With the new funding, SFOX said it is working on rolling out crypto-asset management services, in addition to the existing trading facility. It also plans to increase manpower and expand to more geographic regions in the coming 12 months. 

SFOX’s chief executive Akbar Thobhani – who was previously head of growth and business development at Airbnb – said the plan is a response to increasing interest from clients in a greater level of exposure to cryptocurrency assets.

Thobhani commented:

 “We continue to observe sustained and increasing demand from institutions that want to include cryptocurrencies as part of a diverse portfolio but are reluctant to do so because of uncertainty and volatility.”

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Goldman Sachs, JPMorgan Invest in Axoni's $32 Million Funding Round

Enterprise-focused blockchain startup Axoni has completed a $32 million Series B funding round led by Goldman Sachs and Nyca Partners.

Also participating in the round were Andreessen Horowitz, Citi, JP Morgan, Wells Fargo, Y Combinator and Digital Currency Group, among others. The round raises Axoni’s total venture capital funding to over $55 million to date, according to the firm.

Coffers now full, the New York-based Axoni said it plans to use the funds to continue developing both its data synchronization technology and its ethereum-compatible smart contracting language, AxLang, as well as increase the number of products relating to its auditable distributed ledger-based network, dubbed AxCore.

Greg Schvey, CEO of Axoni, added in a statement that the firm will seek to expand the number of enterprises that use its distributed ledger technology.

“The adoption of distributed ledger protocols in capital markets resembles the early days of adopting TCP/IP for distributed enterprise applications,” commented C. Thomas Richardson, head of Market Structure and Electronic Trading Services at Wells Fargo Securities.

Axoni raised $18m in a Series A round led by Wells Fargo in late 2016, with investors such as Goldman Sachs, JP Morgan, Andreessen Horowitz also taking part in that funding effort. The firm revealed that Citi had later contributed an undisclosed amount in May 2017.

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Decentralized Payment Network Logos Raises $3 Million in Seed Funding

Decentralized payments platform Logos Network successfully raised $3 million in seed funding, the startup announced Thursday.

Led by ZhenFund, the round also saw participation from Digital Currency Group, INBlockchain, Blockwater Capital, Global Blockchain Innovative Capital, AlphaBlock Capital and AlphaCoin Fund, according to a press release.

Logos is working to develop a payments network inspired by the bitcoin blockchain, with a focus on a scalable, rapid network that still maintains high levels of security.

The firm’s CEO, Michael Zochowski, said the platform’s advantage comes from its “novel architecture,” adding:

“We’re similar to bitcoin [but] a little bit more robust, cheaper and massively more scalable. We’re very much focused on our core payments functionality rather than a general purpose network.”

As such, the company is developing a blockchain that combines aspects of various other existing protocols, including delegated proof-of-stake and sharding, to build a network capable of “hundreds of thousands of transactions per second on the first layer,” he said.

Currently, the project has an internal test network, or testnet, running with the core consensus and architecture implemented, and plans to roll out a public testnet later in stages this autumn.

“We’ll start engaging the community at that point. In terms of the mainnet, that’ll be early 2019,” said Zochowski.

The seed funding will go towards not only helping build the network, but also building an ecosystem for the platform, he continued. This includes creating blockchain explorers and peer-to-peer transaction apps.

“We’re really going to build out the user experience, and also build out the business side of things,” Zochowski said, though the immediate focus will be building and testing the network.

Zochowski compared the process he hoped Logos would undergo to NASA, noting that the space agency undergoes a strict development process when building anything.

“We’re really trying to adopt that development process,” he said, concluding:

“It’s one thing to have a white paper and it’s quite another thing to prove that everything works. Right now what we’re trying to achieve is some rigorous benchmarking and then taking a step back and making sure that what we bring to market is truly high integrity code that people can build upon.”

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Draper Dragon Backs $20 Million Raise for Alibaba Vets' Blockchain Startup

A public blockchain project founded by the former head of Alibaba’s blockchain team has raised over $20 million from institutional investors in a combined token and equity sale.

Called Ultrain, the startup announced Monday that leading investors in the round included token funds, such as Draper Dragon, FBG Capital, DanHua VC and Arrington XRP Capital, as well as blockchain industry startups, such as crypto wallet Bixin and exchange OKCoin. Traditional VC funds including Morningside Capital and Ceyuan Capital also participated.

Launched in October 2017, Ultrain was created by a group of former Alibaba staffers. The project’s chief executive, Ray Guo, was in charge of security strategy and data security as the former tech director of the Alibaba Group’s security unit. Additionally, its chief technology officer, William Li, previously led the blockchain development team of Alibaba payment affiliate Ant Financial and was a core architect at AliCloud.

With the new funding, the company said it will focus on the technological development of its public blockchain protocol – also called Ultrain – that is designed as a scalable platform for empowering decentralized applications (dapps)

Earlier this year, the platform launched a test version of its network that was claimed to be able to process 3,000 transactions per second (TPS) on a network with 1,000 nodes hosted on Alibaba cloud servers.

Guo told CoinDesk that public blockchain projects should focus on the “real needs of users” instead of focusing solely on TPS, adding that 3,000 TPS would be plenty for the time being.

He said:

“Alipay has 150 million daily active users, its peak TPS on normal days is around 4,000 to 5,000. The next step for dapps is breaking 1 million daily active users. Therefore a public blockchain with 3,000 TPS will be enough for dapps for at least two years.”

While being a prolific prep-school for blockchain entrepreneurs with over 65 blockchain-related patents so far, pushing forward blockchain applications at Alibaba is not as easy as it might seem, according to the team.

Explaining why he’d made the decision to leave and start his own project, Guo told CoinDesk that Alibaba’s strategy is to “build an ecosystem around itself.”

“A vital part of this strategy is strong control over the partners within the ecosystem – it is a centralized way of thinking. It is very hard to change the minds of the internal business leaders and persuade them to negotiate with the partners instead of controlling them,” he said.

Li also spoke to the greater possibilities to be had when founding an independent project, saying:

“Currently, the country’s policy towards entrepreneurs is relatively friendly, so our blockchain exploration can cover every aspect of the technology, including a public blockchain focusing on a token eco-system. … On the contrary, all I could do at Ant Financial was a token-less consortium blockchain.”

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The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.