Ethereum’s biggest supporter is back on track with the close of a carefully constructed funding round.
ConsenSys, an Ethereum development operation headquartered in Brooklyn, N.Y., has raised $65 million from financial institutions JPMorgan, Mastercard and UBS, as well as leading firms in the decentralized finance (DeFi) space.
Having toughed it out through the crypto winter of 2018-2019, Tuesday’s bullish fundraising announcement is further evidence ConsenSys has found its footing. The firm has now been successfully restructured into two parts: a core software business (CSI) and an investment and incubation arm known as ConsenSys Mesh.
In addition to the big banks, the $65 million round included Filecoin’s Protocol Labs, DeFi’s Maker Foundation, Fenbushi, The LAO, Sam Bankman-Fried’s Alameda Research, CMT Digital, China’s Greater Bay Area Homeland Development Fund, Quotidian Ventures and Liberty City Ventures.
Last year, ConsenSys brokered a deal with JPMorgan to acquire Quorum, the enterprise-focused Ethereum client that now forms an in-house software stack of Codefi, Diligence, Infura, MetaMask and Truffle.
The general tightening of the ship has seen ConsenSys appear to chart a course away from consulting and services, towards being more product- and revenue-focused. MetaMask – a key gateway to the world of DeFi – counts over 3 million monthly active users and ConsenSys earns a sliver of fees on the wallet’s $1.95 billion token swap feature.
Founder and CEO Joe Lubin said ConsenSys was always a product company – only it was embedded in an ecosystem and dependent on a technology that was extremely immature.
Today things have moved on some. For example, with Mastercard as an investor, ConsenSys engineers are using the Quorum blockchain to build a permissioned network for commerce and finance.
“The round was pretty carefully constructed,” Lubin said in an interview. “It's almost all strategics, and we intended for them to be in different industries. Some in the traditional economy, some in the decentralized economy, and we also intended for it to be regionally distributed.”
The ConsenSys chief could not go into detail at this time about what was being built with the large financial institutions that invested in the round, but said:
“We have multi-year commercial arrangements with JPMorgan and Mastercard, and have commercial activity with UBS.”
Looking ahead, Quorum’s enterprise-friendly connection to Ethereum mainnet will have managed services launched around it. Also driving the theme of convergence, MetaMask Institutional, which is in beta, will roll out soon.
“MetaSwaps, launched first into the consumer platform, is providing swap trading capabilities for nearly the entire universe of active tokens,” said Lubin. “We can take that next, wrap it in APIs and make it available to developers in both Infura and in Truffle, so developers can build swapping directly into their software. You can also package it up into a module and enable trading on Quorum systems, say, on a cloud.”
As such, ConsenSys is positioned to build the infrastructure needed to make institutional DeFi a reality.
With this in mind, Lubin pointed to the Baseline Protocol, a way of enabling organizations to link their systems of record to one another using a global frame of reference: the Ethereum mainnet.
“Tokenization is happening in the Baseline Protocol, so you can pay for inventory with tokens,” Lubin said. "Invoices on some projects right now are starting to get tokenized. So you can imagine factoring invoices and trading those and in markets. It's happening relatively quickly.”
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