Synthetix announces $12 million raise led by Paradigm, Coinbase Ventures, and IOSG


The Synthetix DAO has added some new, perhaps surprising, voices to its governance.

Synthetic Assets Protocol today announced a $ 12 million fundraiser led by venture capital firms Paradigm, Coinbase Ventures and IOSG. The funds bought SNX tokens directly from the DAO treasury and “will, wherever possible, make a contribution by providing liquidity in the form of SNX collateral and also by participating in their rapidly evolving community governance system” it in the announcement.

“We are very excited to support synthetixDAO in building the leading platform for synthetic assets,” said Arjun Balaji, investment partner of Paradigm. “Synthetix has one of the best communities in Crypto and we’re happy to be a part of it.”

The investment is one of the first cases of funds investing directly with and through a project led by a DAO. The interaction of VCs with DAO controlled protocols has been a hot topic lately. Some argued that VCs should not be given preferential treatment, while others say that VCs, like any business, are welcome to participate in an open ecosystem.

A recent tweet thread by Hayden Adams, the founder of Uniswap, advocated working with VCs – as long as they are the right ones.

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I think it’s worth briefly explaining the positive and mutually beneficial experiences I’ve had with @paradigm @ a16z @usv and other investors.

I’ve seen a lot of negativity and propaganda so I think it’s worth sharing my personal experience.

Short thread:

– Hayden Adams (@haydenzadams) February 12, 2021

Jordan Momtazi, a key person in charge of Synthetix DAO (and the previous decentralization of Synthetix COO before governance), agrees that it’s all about how a protocol works.

“A lot of VCs don’t offer much added value. The delta between quality VCs and the rest is pretty big, ”he said in a statement to Cointelegraph.

Each of the three VCs that participated in the $ 12 million raise brings added value to the table that a single investor may not be able to muster, Momtazi said.

“Paradigm has helped the protocol recruit talent through its in-house HR department and network. You also actively helped think through our v3 planning. Insights into approaches relating to our re-architecture, ”said Momtazi. “Coinbase Ventures has helped with connectivity for many functions both internally and externally.”

Meanwhile, IOSG is helping fuel Synthetix’s move into China by helping with the recruitment of a regional leader for China, as well as “personal roadshows and educational content creation in Chinese.”

The increase takes place in a particularly productive time for Produhetix. The team recently announced the launch of Tesla synthetic stock, and SNX was among the tokens the filing indicates may be next listed as a Grayscale Investment Trust.

Momtazi hopes the newest members of the community can help with this.

“Using the sharpest minds to solve the toughest problems is part of the community’s success and we look forward to working closely with these new stakeholders.”