Investment Fund Announcement
The investment fund focused on Web3 and blockchain, known as ABCDE, has announced that it will stop making new investments. Despite halting fresh capital inflow, the fund, which manages $400 million, has expressed its intent to continue backing existing projects. This update came from co-founder Du Jun, who is also one of the founders of the Huobi exchange, in a post on X dated April 19.
Commitment to Existing Projects
While ABCDE will not be engaging in new project investments or initiating a second fundraising phase, Jun emphasized that the organization remains dedicated to providing ongoing support and helping with the exit strategies of current projects. His personal emphasis will shift away from primary market financial investments towards strategic, incubation-driven ventures, aiming for long-term industrial synergy and value generation.
Last Investment and Portfolio Highlights
This decision arrives on the heels of ABCDE’s last investment in January 2023, where it backed Soon, an Ethereum layer-2 solution that gathered $22 million through a non-fungible token sale for its mainnet launch. Soon claims to operate with superior speed and efficiency compared to Solana, boasting average block times of 50 milliseconds versus Solana’s 400 milliseconds.
The fund’s portfolio includes a variety of investments, with its allocations comprising 28% in Bitcoin scaling technologies, 16% in Ethereum’s liquid staking derivatives, and 12% in various layer-2 solutions and smart contract platforms, according to data from Cryptorank. Over three years, ABCDE has invested more than $40 million into over 30 projects while maintaining a strong internal rate of return, even amid challenging market conditions.
Future Plans and Market Reflection
This announcement follows the recent launch of Vernal, a new incubator brand by one of ABCDE’s co-founders, with plans to reveal shareholder details and project incubation rules soon. Jun clarified that ABCDE’s halt in fundraising is not due to liquidity issues but a reflection on the evolving landscape of cryptocurrency development. He expressed concerns about what he sees as a short-sighted approach by many projects, which prioritize swift listings over sustainable growth.
Industry Perspectives
In a related discussion at the recently concluded Paris Blockchain Week, Charles Hoskinson, the founder of Cardano, highlighted the need for fourth-generation crypto projects to explore cooperative tokenomics to better compete with larger, centralized technology firms that are entering the crypto ecosystem. He argued that current market structures create adversarial conditions, emphasizing the necessity for cooperative frameworks to foster a thriving global ecosystem.
