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20 May 2024
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Crypto VC Firms Pour Millions Into “Professor Coins” Despite Centralization Concerns

Crypto VC firms have increased investment in the market this year despite foundational blockchain concerns. A new Bloomberg report shows an inflow of funds “Professor Coins,” virtual asset projects ignited by University professors. 

According to the report, firms launched by academics have received millions from VC firms as the market rebounds. The inflows come on the heels of renewed investment in Q1 2024 after Bitcoin (BTC) ballooned to an all-time high above $72,000. 

Firms like CheckSig, Sahara, etc. were founded by University academics and have recorded inflow in the last two months.

Crypto VC Firms Back Restaking

The turn to professor coins has seen significant inflows to firms that offer restaking services. Restaking allows validators to rely on already staked assets. This makes room for new projects to why a head start by borrowing resources.

Crypto VC firms gained interest in EigenLayer and Babylon seeing recent flows of $118 million to both projects. Founded by Sreeram Kannan, a professor at the University of Washington, the company secured $100 million in funding from Andreessen Horowitz while Babylon founded by Stanford University Professor David Tse raised $18 million. 

Riad Wahby, an engineering professor at Carnegie Mellon University noted the research and utility of both projects in the industry. “They’ve thought about a lot of these kinds of restaking technologies. I mean, that’s sort of their baby, so it kind of makes sense. And I think more and more of this technology is going to come from research.” 

Kate Lawrence, the Chief Executive of VC firm Bloccelerate said that academic background could be a detractor because professors tend to focus on theory rather than practice. However, the firm invested in both projects based on the restaking model.

Centralization Concerns

The move to professor coins by crypto VC firms isn’t without industry criticisms as many cite reduced decentralization. This comes after EigenLayer’s token launch plan which will distribute 1.67 billion tokens with over 50% going to early participants and investors.

The coins will also be nontransferable causing slight concerns. The team explained that making it non-transferable provides time to improve decentralization. 

Also Read: FED Silently Starts Money Printing, Bitcoin Price Rally in Sight

The post Crypto VC Firms Pour Millions Into “Professor Coins” Despite Centralization Concerns appeared first on CoinGape.

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