Pontem Network Investor Spotlight

Crypto education

In one of our recent posts, we explained the basics of venture capital and fundraising for crypto projects. We also broke down what a private token sale is and how it has revolutionized venture financing. (Make sure to read that article here if you have not already.) Towards the end of the post, we mentioned that Pontem Network raised investor funds through a private token sale.

Today, we are going to tell you a little bit more about that fundraising round and shine a spotlight on our incredible investors. Each one brings their own unique expertise, focus, and investing thesis. Together, they form a supportive community who help Pontem Network grow and push us to succeed. We truly could not do what we do without them!

Pontem’s Private Token Sale

In June, we announced our $4.5 million fundraising round with more than 30 participants.  

Technically, this raise came between the “Seed” and “Series A” in traditional VC lingo, but it still served the same purpose: equipping Pontem with the capital we need to keep building and connecting us with smart, experienced mentors. Because we used a private token sale, our backers received Pontem tokens with governance rights instead of equity in our company.

This was Pontem’s largest fundraising event to date, following a previous seed round with our two lead investors, Mechanism Capital and Kenetic Capital. Lead investors are, fittingly, the “leaders'' of a fundraising round. They put up the most capital and often handle the logistics and behind-the-scenes needs, including making connections to other partners for tasks like accounting and legal work.

Our Investors

Name: Kenetic Capital

Investment Thesis/Focus: Blockchain Technology, Asia-focused

Major Investments: Red Date, Caspian, Auros

Kenetic Capital is one of our two lead investors who participated in both of our fundraising rounds. Founded by Jehan Chu, Kenetic has invested in blockchain projects since 2013. One of their most intriguing investments is in Red Date, which is building software for China’s Blockchain-based Services Network (BSN), a nationalized blockchain infrastructure. Since Red Date is instrumental in creating a national blockchain for the world’s largest country and economy, Kinetic Capital has invested in an extremely important project. The firm focuses on Series A and Series B stage companies. They also focus on Asian companies, although they do invest globally. Kenetic also manages Auros, a proprietary cryptocurrency market maker.

Name: Mechanism Capital

Investment Thesis/Focus: Crypto, NFTs, Blockchain Gaming

Major Investments: Nansen, Banqi, Yield Guild Games, PleasrDAO

Mechanism Capital  is the other of our two lead investors. Their principal focus is blockchain projects, including non-fungible tokens, play-to-earn blockchain gaming, cryptocurrencies, and more.

Name: Animoca Brands

Investment Thesis/Focus: “To deliver digital property rights to the world's gamers and Internet users, thereby creating a new asset class, play-to-earn economies, and a more equitable digital framework contributing to the building of the open metaverse.”

Major Investments: Axie Infinity, Yield Guild Gaming, Dapper Labs, OpenSea

We profiled Animoca Brands in our article on trends in NFT gaming because Animoca is one of the most important players in that space. Founded by Yat Siu, the Hong Kong-based Animoca is known for its partnerships with high-profile brands for NFT gaming, with intellectual property licensed from Formula 1®, Marvel, WWE, Power Rangers, MotoGP™, and Doraemon. They also created the popular NFT-based MMO game, The Sandbox, which we covered in our article on NFTs and augmented reality. In addition to their game development business, Animoca Brands also invests in NFT and blockchain products, including Pontem Network. We are grateful to join huge names like Sky Mavis (creator of Axie Infinity), Dapper Labs (creator of CryptoKitties and NBA Top Shot), OpenSea, and Alien Worlds. (We profiled many of these products in our deep dives on play-to-earn gaming and NFT collectibles.)

Name: Web3 Foundation

Investment Thesis/Focus: “Software development and research in the field of decentralized software protocols”

Major Investments: Polkadot, Kusama

The Web3 Foundation is not technically a lead investor since they did not participate in our VC raise. However, the Web3 Foundation gave us a hugely important grant in February before our private token sale. The foundation gives grants to projects which develop the software infrastructure for Web3.0, the future of the Internet. Our grant sponsors our efforts to make the Move language, which is ideal for smart contracts, compatible with Facebook-backed Diem.

Name: Avalanche

Investment Thesis/Focus: “Accelerator for developers building decentralized applications like lending, derivatives, stablecoins, getting funding for community work, and things not yet imagined.”

Major Investments: Aave, Sushiswap, Topps NFTs

Avalanche is a smart contracts platform that’s built for decentralized finance, with a focus on speed, reliability, and scalability. We previously called Avalanche a potential “Ethereum-killer” because of its blazing fast transaction times! Avalanche also had one of the most succesful private token sales of all time, garnering $230 million for its AVAX tokens. Avalanche-X is Avalanche’s venture arm, which distributes grants to “moonshot” projects building decentralized applications. Currently, Avalanche-X has open grants for projects building decentralized exchanges, lending, stablecoins, derivatives platforms, and volatility indices on Avalanche.

Name: Delphi Ventures

Investment Thesis/Focus: “With our global team of dedicated analysts, specialising in specific sectors of the digital asset industry, we assess projects down to their minute details; from their specific use case and economic models, to their community and cultural impact.”

Major Investments: Avalanche, Solana, Bitcoin, Axie Infinity

Delphi Ventures is the investment arm of Delphi Digital, a “cutting-edge crypto research” firm.The company was originally founded to bring institutional-grade research to the crypto industry, and has since expanded into a multi-pronged enterprise. In addition to venture investing, the company also publishes research reports on the blockchain space and develops new projects through its Delphi Labs division.

Name: Alameda Ventures

Investment Thesis/Focus: “A pragmatic, real-world oriented approach to finance - making it more accessible for all.”

Major Investments: Solana, Paraswap, Clover, Blockfolio

Alameda Research, founded in 2017, is a leading high-frequency trading and market making firm in cryptocurrencies and blockchain. The firm manages $10 billion in digital assets and trades over $1 billion per day across major coins, altcoins, and derivatives. Alameda Ventures is the investment arm of the firm, which invests in all types of blockchain and finance companies. They offer guidance on a wide range of topics, including “tokenomic design, governance, token liquidity to operation, legal and audit.”

Other investors who participated in our round include: Genesis Block Ventures, Spartan Capital, Altonomy, CMS Holdings, Momentum 6, Taureon, AU21 Capital, GIBC, and more!

Why Invest in Pontem Network?

Pontem Network is the premier experimentation platform for Facebook’s permissioned blockchain, Diem. The Diem Association, which includes venture capital firms such as a16z, Union Square Ventures, and Blockchain Capital, as well as tech leaders like Uber, Lyft, and Spotify, are collaborating with Facebook to build a blockchain-based stablecoin to financially connect the globe.

The goal of Diem is to connect the billions of people around the world who lack access to traditional banking and finance using a blockchain that is stable, fast, and secure. We write all the time about how Diem supports Facebook’s ambitions to dominate payments and to become a “metaverse company.” We believe Facebook’s entry into the blockchain space will introduce billions of people to the crypto revolution and truly change the world.

That’s why we created Pontem Network: the best experimentation platform for Diem. Our incentivized testnet, Move VM smart contract platform, and Pontem Blocks, our low-code development tool, make it possible to start building for Diem. In this way, Pontem offers a head start to start designing projects for Facebook’s Diem-powered metaverse. We are so grateful to our investors who support us in this mission.

To stay updated on our work, be sure to follow Pontem on Twitter, subscribe on Medium, and connect with us on Telegram.

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  1. Blockchain fees. Most NFTs are issued on the Ethereum blockchain, where you have to pay for gas. NFT minting involves a complex smart contract and thus requires a lot more gas than simply sending crypto. Plus, the gas has been very expensive in the past few months, so you can expect to pay at least $50–100 in gas fees per NFT collection.
  2. Marketplace fees. While you can issue an NFT on your own, it will be hard to promote it and find buyers. That’s why most creators work with NFT marketplaces like OpenSea and Rarible. And while minting NFTs on OpenSea is technically gasless and free, there is a gas fee to initialize a seller account and accept a bid from a buyer — expect to pay around $150 in total. On Rarible, the costs can exceed $600.
  • Facebook has almost 3 billion monthly active users, giving Diem the largest potential audience of any blockchain project on earth;
  • The stablecoin will probably get integrated into transactions on Facebook, Instagram, Messenger, and Whatsapp (shopping, paying for ads, sending money to friends etc.);
  • Facebook can afford to hire the best developers and marketers, so the execution and promotion will be top-notch;
  • Diem’s programming language, Move, is safe, flexible, and well-suited for writing smart contracts;
  • It should be possible to add third-party dApps to the Diem ecosystem — think of WeChat with its thousands of mini programs, but on blockchain.

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