As Cosmos enters its next chapter, one of the leading firms behind the interoperability network is rolling out a $20 million fund to support promising projects.

“We’re trying to lay the foundations for decentralized networks to flourish as part of Cosmos,” Tendermint CEO Peng Zhong told CoinDesk in an interview. “So, just providing another source of liquidity for people that want to build on our stack.”

The fund’s announcement is timed to the activation of Cosmos’ inter-blockchain communication protocol (IBC), a major milestone that went live earlier today. IBC enables distinct blockchains built on Tendermint Core to work together. The cross-chain flow of tokens could be a catalytic step for making financial products in the Cosmos network more widely used.

The company says the Tendermint Ventures fund, denominated in ATOM and IRIS tokens, will be the largest in the Cosmos ecosystem. 

“Tendermint Ventures is similar to ConsenSys Ventures,” Peng said, referring to the investments wing of Joe Lubin’s Ethereum workshop. “We're going to identify promising projects, building using Cosmos tech and provide venture capital to accelerate their growth.”

The fund is meant to complement other efforts in the ecosystem, such as the $10 million Terraform Capital fund announced in February. But where Terraform focuses on decentralized finance (DeFi) on just the Terra blockchain, Tendermint Ventures seeks broader reach.

"In the near term, we are focusing on creating a really robust DeFi ecosystem within Cosmos," explained Jin Kwon, the Tendermint chief of staff leading the new venture fund. "Our goal at the end of the day is that these projects that we bring in will be complementary to each other. So one may be doing something in one aspect of DeFi and another project will be to leverage that project."

Indeed, Terra, which recently launched a high-yield savings account known as Anchor, is among the early investments by Tendermint Ventures. To date, the fund has also invested in Regen, IRIS, B-Harvest and Tgrade.