Cosmos Protocol Archway Raises $21M to Provide Developer Rewards
CoinFund and Hashed co-led the seed funding round in the Tendermint spinout behind the project, Phi Labs.
Archway is a Cosmos-based protocol that rewards decentralized application (dapp) developers building on the network. On Thursday, Phi Labs, a contributor to Archway, said it raised $21 million in a seed funding round that was co-led by crypto investment firms CoinFund and Hashed.
Phi Labs was spun out of Ignite, formerly known as Tendermint, which launched the Cosmos blockchain-interoperability protocol. Cosmos has grown to have 38 different blockchains, more than 250 projects built on the ecosystem and over $100 billion in digital assets riding atop the network.
The Archway protocol acts as an on-ramp to Cosmos, enabling developers to deploy cross-chain dapps and receive rewards for their contributions to the network.
“Most layer 1 protocols right now reward validators and miners for performing work for running the actual blockchain. But there’s this whole big ecosystem of participants that are very big contributors to the protocol,” Phi Labs founder Griffin Anderson told CoinDesk in an interview.
“Developers are the most important thing for any layer 1 protocol,” he continued. “They bring users, transactions and activity to the protocol, but they don’t receive any value for their contribution unless they purchase into the protocol token themselves.”
How it works
Archway allocates its native ARCH token to dapps in proportion to the number of users they bring to the network. Developers are free to use those rewards however they want, which means dapps can provide incentives for their own users without dipping into a limited token treasury.
“A dapp developer can build an app on [Archway], and that app can start to earn native network protocol rewards from inflation and gas rewards that are normally burned or go directly to the miners or the validators of the protocol,” Anderson said.
Anderson said Phi Labs will use the new capital to build software development tools to make it easier for third-party developers to build on the protocol. Phi Labs will also continue to contribute to Archway.
Other participants in the funding round included Blockchain Capital, Wintermute, Figment, Chorus One, stake.fish, Lemniscap, Hypersphere Ventures and Cosmostation.
“There’s been a proliferation of smart contracting platforms that have hit the market over the last 12 to 18 months,” CoinFund principal Billy Dishman told CoinDesk. “Most of them have focused on different trade-offs around scalability and decentralization. No one has really ideated on the tokenomics.”
Phi Labs, on the other hand, is focused on tokenomics and developer rewards, said Dishman, and “really paying attention to this constituency, which is the lifeblood of any smart contracting platform.”
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