Railgun Aims for Private DeFi With $10M Backing From DCG
The crypto conglomerate acquired and staked over $10 million of the project’s RAIL privacy token.
Digital Currency Group (DCG), the parent company of CoinDesk that hit a $10 billion valuation late last year, has entered into a strategic partnership with Railgun DAO through a $10 million investment to bring a privacy protocol to decentralized finance (DeFi).
The Railgun protocol has deployed on Ethereum, Binance Smart Chain and Polygon, with Solana and Polkadot launches soon to follow. Railgun has also announced plans to add non-fungible token (NFT) support in the coming weeks.
Railgun brings zk-SNARKs to the primary layer of Ethereum, meaning that the protocol can remove identifying information from a transaction even while interacting with smart contracts and DeFi platforms, which would be particularly useful for professional traders and asset managers.
The $10 million investment from DCG continues a longstanding bet on privacy applications in the transparent-by-design world of public blockchains. DCG has also backed privacy tokens Zcash and Horizen.
“Through a collection of smart contracts that verify zero-knowledge proofs, the Railgun team has built a privacy system directly on Ethereum and other Layer-1 protocols, from which you can interact with decentralized exchanges, lending platforms, and popular smart contract applications,” Matt Beck, director of investments at DCG, said in a statement. “Railgun fills a clear gap in the market, and solves the privacy problem that everyone who uses crypto will come across.”
As part of the partnership, DCG has acquired and staked over $10 million of Railgun’s native RAIL token and donated over $7 million in stablecoins to the project’s decentralized autonomous organization (DAO) treasury. DCG has also devoted resources through mining and staking subsidiary Foundry Labs to ensure that Railgun’s back end is strong enough to endure high demand.
“It’s very new to have a large investor send funds to a fully decentralized DAO treasury in support of a project, without any admin key or multisig team,” attorney Edward Fricker, who advised on the deal, said in a statement.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.