Polychain, Web3 Foundation start a fund to back projects building on Polkadot

Polychain Capital has partnered with the Web3 Foundation, a Swiss non-profit fostering Polkadot development via grants, to create the Polkadot Ecosystem Fund. The fund focuses on projects building atop the Polkadot ($DOT) network. Unlike the Web3 Foundation’s grant program, the new fund may take an equity position in participating startups in exchange for an investment. The size of the fund is reportedly “in the orders of millions,” but the teams did not disclose their exact contributions.

Why it matters:

• Polychain participated in Polkadot’s first token sale, which raised ~$144 million, and the Web3 Foundation reported its most recent fundraise closed at a $1.2 billion valuation. To protect its potentially sizable investment, Polychain appears eager to spur ecosystem growth within the Polkadot network, which, in Maya Zehavi’s words, is crypto’s version of dogfooding.
• Polkadot is one of many new blockchains slated to launch in the coming months. As Chris Burniske points out, this dense launch schedule could spread developers thin. But talent tends to gravitate towards platforms with the best available tooling and financial support. Polkadot Ecosystem Fund could also woo existing projects away from their current platforms (think Ethereum’s DeFi sector) with the promise of new funding.