Dfinity, a Swiss startup operating an unlimited capacity "blockchain computer," announced on Wednesday a $61 million fundraiser. The money comes from Andreessen Horowitz and Polychain Capital, a crypto-focused hedge fund backed by some of the biggest names in the startup world.
Dfinity raised seed funding, netting about 3.9 million CHF ($4.2 million). Given that the fund was in the form of bitcoin and ethereum, its value rose to about $40 million later on. Polychain contacted Dfinity in the summer of 2017 promising to lead a small round of funding. However, their investment increased when Polychain Capital and Andresseen Horowitz joined to present a much larger investment.
"We decided to change the funding model," wrote Dfinity President and Chief Scientist, Dominic Williams. Williams states that they planned to keep the new investment capped at 20 million CHF. That plan changed once they realized they were "completely unprepared for the explosion in scale of the crypto industry."
Williams promised to commit to a democratized funding model as he describes it. However, he said an ICO may or may not take place. Williams described the ICO market as far more saturated than it was when Ethereum launched its own. He described them as undiscriminating and unscrupulous projects that are cashing in on people trying to make a quick profit.
"The lack of discrimination between good and bad projects means there is very poor price discovery and, if we run a traditional ICO we might also become guilty by association in many eyes."
As part of the deal, Polychain established the Dfinity Ecosystem Venture Fund to back projects built on the Dfinity computer. Dfinity plans to undergo KYC and AML procedures in the near future, prior to a token pre-sale.
According to its developers, Dfinity improves on Ethereum just as Ethereum improved on Bitcoin. Ethereum shifted from simply being a virtual ledger to being a virtual computer powered by smart contracts (computer protocols that automatically activate and enforce transaction agreements). Dfinity claims that its "third generation" system solves speed and capacity problems associated with traditional cryptocurrencies. They also claim that it better integrates AI with the wisdom of the crowd to govern the blockchain.
In a blog post last year, Williams implied the system could block crime-related transactions and lessen the effects of hacks. He expects Dfinity's cloud to become cheaper than systems like AWS because of reliance on AI.