Source: Cointelegraph Original: "{title}"
The investment fund ABCDE, focused on Web3 and blockchain, has paused new investments, but this $400 million fund will continue to support existing projects.
According to Du Jun, co-founder of ABCDE and founder of the Huobi exchange, in a post on the X platform on April 19, this $400 million fund will no longer invest in new projects and will not raise funds for the second phase of the fund.
However, Du Jun stated that the fund will continue to "provide post-investment support and exit arrangements for existing projects" to ensure that the company's commitments to entrepreneurs and liquidity providers (LPs) are fulfilled.
"My personal focus will also gradually shift from financial investments in the primary market to a direction led by strategic investments and based on deep incubation, with greater emphasis on industrial synergy and long-term value creation," Du Jun added.
According to a report by Cointelegraph on January 22, nearly three months before this announcement, ABCDE's last investment was in the Ethereum layer two solution Soon (Solana Optimistic Network), which raised $22 million through a non-fungible token (NFT) sale, marking the launch of its mainnet.
The Soon mainnet claims to outperform Solana in speed and efficiency, with an average block time of 50 milliseconds compared to Solana's 400 milliseconds.
According to data from Cryptorank, ABCDE is a $400 million fund, with 28% of its investments allocated to Bitcoin (BTC) scaling technology, 16% invested in Ethereum liquid staking derivative finance (LSDFi) infrastructure, and another 12% invested in L2, re-staking, and smart contract platforms.
Du Jun stated that over the past three years, ABCDE has invested more than $40 million in over 30 projects, and despite the current poor market environment, its internal rate of return (IRR) "remains globally leading."
The news of ABCDE pausing fundraising was announced a month after the fund's co-founder launched a new incubator brand, Vernal.
This new incubator plans to announce the shareholder list and incubation rules for its first batch of projects in May, along with the announcement of the first investment projects.
Du Jun stated that the pause in ABCDE's fundraising is not due to funding constraints or shortages, but rather a fundamental concern about the current trajectory of the cryptocurrency industry.
"Frankly, I increasingly find it hard to agree with the current ecological atmosphere of the primary market," Du Jun said in a post on the X platform on April 19, adding:
"Many projects are extremely shortsighted, only considering how to get listed on exchanges as quickly as possible, often leaving behind a mess."
"Even more concerning is that some primary market funds not only have no reflection on this but also hype their 'listed projects' and short-term market performance, while never mentioning the value creation of the projects themselves," he added.
Charles Hoskinson, founder of Cardano, called for fourth-generation cryptocurrency projects to adopt more collaborative token economics to compete with major centralized tech companies entering the cryptocurrency industry.
"Currently, the problem facing the cryptocurrency field is that the token economics and market structure are essentially adversarial. This is a zero-sum game," Hoskinson said at the Paris Blockchain Week event on April 9. "Instead of seeking confrontation, you must find token economics and market structures that can place you in a cooperative equilibrium."
"You cannot build a global ecosystem this way, nor can you win this way," he added. "Because the reality is that the incumbents are much larger."
Related: Hoskinson: Fourth-generation cryptocurrencies need to establish collaborative token economic mechanisms to cope with competitive pressure from tech giants.
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