Polychain Capital and Chinese Bank Join Hands in the Nervos Network STO

Polychain Capital and Chinese Bank Join Hands in the Nervos Network STO
Polychain Capital has so far said that it will partner with China Merchants Bank International (CMBI) to contribute $5.7 million to the STO Nervos Network scheduled to kick off on October 16.
Polychain Capital and Chinese Bank Join Hands in the Nervos Network STO

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Depressed Crypto Markets Make Great Buying Opportunities for VCs

When the first two crypto hedge funds came on the scene in December 2017 the entire market and industry was in a completely different place. Bitcoin was trading in five figures and on a seemingly unstoppable upward surge so shorting it, as these funds allowed for the first time ever, was the better bet.
Hedge Turns Venture for Long Term Investments
Just over a year later the scene is completely different and crypto markets appear to be a desolate wasteland with Bitcoin eyeing further losses below $3,000. Shorting long term is less than appealing so the only place to go for venture capitalists is long on Bitcoin and crypto. Hedge funds investing in crypto now are starting to look more like VCs as the ICO market dissolves into a different form of investment.
According to Bloomberg there are several VCs that are looking at the long game, Polychain Capital being one that has just raised $175 million for a seven year fund. Arca Funds is another that is considering buying up distressed crypto projects as partner and portfolio manager, Jeff Dorman, explained;
“There’s going to be a lot of opportunity in distressed buying and even activist investing. Often you can buy below even the cash value of the company.”
According to Crypto Fund Research around 125 venture funds that provide capital in exchange for an ownership stake were launched in 2018, compared with 115 hedge funds acting as investors. Many of these hedge turned venture funds are focused on acquiring heavily discounted Simple Agreements for Future Tokens (SAFTs) from projects that plan to issue tokens on startup. Pantera Capital Management expects to see more companies raising capital this way, as its own fund invests in tokens ahead of ICOs.
Eurekahedge Crypto-Currency Hedge Fund Index reports that 70% of crypto hedge funds lost out last year while 42 closed up. 2019 will be the year where only the strongest survive but unlike 2018, buying opportunities will be plentiful. Managing partner at Texas based Multicoin Capital Management, Kyle Samani, said;
“We are talking to a lot of institutional investors. A lot of smart people who’ve been interested in crypto for a year, two years, and were waiting for it to cool down, are now looking at the space activity.”
Many of the new funds have longer lock-up periods so investors will be looking at a long term gain rather than quick returns from ICOs. With any nascent technology overnight gains can be a good thing initially but the long term is where the real returns will be and crypto has a long way to go yet.
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DoE Backs Blockchain Energy Platform with $1 Million US Grant

The U.S. Department of Energy (DoE) has announced it will award 95 grants for a total of $95 million to 80 businesses in 26 states. One beneficiary is blockchain business Grid7, which is set to receive almost $1 million as a government grant.

DoE Backs Blockchain Energy Project

Grid7 is being awarded $999,363 by the DoE and previously received around $150,000 in 2017 through an earlier phase of the same program. The Colorado-based project aims to provide a “scalable platform for secure energy transactions and control.”

According to the database: “The project will develop a novel software platform to address critical cybersecurity threats for power plant control systems, industrial control systems, and Cyber-Physical Systems (CPS) by leveraging blockchain and other patent pending cybersecurity technologies developed in this project. Other applications will enable secure energy transactions to increase grid reliability and integrate a more decentralized energy infrastructure.”

Grid7 claim that the electric grid is transforming from a centralized system, via a decentralized system, to a distributed system. At this point, Distributed Energy Resources (DERs) come together in the form of Nanogrids and Microgrids. These include distributed solar, energy storage, and electric vehicles.

Fed Gets Licence to Use Blockchain Product

The funding, which was awarded in the second phase, went to startups that had shown “technical feasibility for innovations” during the initial funding round. This means the blockchain project had convinced the DoE that their product was feasible and worthy of development.  If the project meets the third phase of funding, it would receive federal or private funds which would have no dollar or time limits.

The DoE recognised that small businesses play a large role in pushing innovation and creating jobs in the U.S. economy. It also highlighted that the programs were created to advance innovation in federal agencies leading to the possibility of a government agency adopting the blockchain model. For projects that receive this funding, they give the government a royalty-free licence for Federal Government use.

Managing Partner of Grid7, David Cohen, was previously an executive board member of the IOTA Foundation, which is focused on the sharing economy and the Internet of Things (IoT). Cohen was a founding Emeritus Member of the GridWise Architecture Council (GWAC), which helped create the vision for the SmartGrid industry and contributed to drafting the Energy Independence and Security Act of 2007.

Grid7 used rule 506(b) as an exception to its token being classified as a security even though its claimed type of offering was the simple agreement for future tokens (SAFT). This model was said to be a securities offering, “at least initially,” by the U.S. Securities and Exchange Commission (SEC) when it announced that Ethereum was not a security. The filing also showed that nearly a quarter of a million pounds has so far been raised in the token sale, which has no hard cap.

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