Crypto Analysts have continued to discuss the boom of the cryptocurrency space, which had seen the market become one of the hottest topics of debate on the lips of prominent investors. However, the DeFi space’s growth has not gotten enough attention yet despite the impact of the space on cryptocurrency trading overall.
Many DeFi protocols have recent received several funding and intervention from different crypto-affiliated ventures. The latest such intervention reportedly received is Synthetix DeFi Platform, which has now raised about $12 million from Coinbase Ventures, IOSG, and Paradigm.
The ventures purchased Synthetix tokens
In the official documentation of the new funding received by Synthetix from the venture capital, it was well noted that it was obtained via the purchase of tokens. The well-known traditional funding and intervention method will always be that of the investor paying the funds directly to the business. Still, the venture capitals have taken another approach to it.
The nature of the technology behind synthetix details that the DeFi platform is run by DAO, with the holders of its token expected to project the DAO’s trajectory. The platform’s success cannot be understated, hence the reason why the venture capitals have chosen the Defi protocol. The success of SNX, the protocol’s governance token, cannot also be overlooked, considering that it is responsible for the contribution of about $3 billion to the growth of the DeFi space.
An Executive from Paradigm Investment, Arjun Balaji, believes that Paradigm had made the right decision to invest in Synthetix, as the Defi platform has one of the best systems in the Blockchain space were proud to now be included in it. Balaji has also expressed his firm’s delight in aiding synthetixDAO to build one of DeFi’s best lending platform.
The effect of Venture Capital on DeFi Platform
Many analysts have debated the role venture capitals play in the development and growth of the DeFi space. While some analysts believe that venture capitals have seemingly boosted the fortunes of the growing DeFi space, a few others disagree. Some crypto analysts feel like the venture capitals might threaten the open nature of DeFi platforms by influencing some business decisions, which might hamper their growth.
Hayden Adams, the founder of the DeFi protocol Uniswap, believes that the relationship between venture capitals and the DeFi platform is a healthy one that is set to benefit both parties. Many venture capitals have helped several DeFi platforms bolster their services up by investing not just funds but also technology and human resource. The new venture capital funding on Synthetix is also set to improve their technology and human resource. The venture capitals have committed to helping the DeFi platform with the needed infrastructure for its next phase.