The Web3 Foundation has closed on a private sale of tokens to fund the development of Polkadot, the ambitious blockchain interoperability project started by ethereum co-founder Gavin Wood.
The Swiss nonprofit said Thursday that the 500,000 DOT tokens (5 percent of the total supply) were sold at the targeted valuation for the project of $1.2 billion, and that investors wanted more than were available. However, the foundation did not disclose the sale’s proceeds, and it is not clear whether the amount raised was the full $60 million sought.
That’s because, as CoinDesk reported last month, three Chinese funds agreed to pay prices that, on average, valued the project below $1 billion. None of those funds were among the investors that Web3 identified in its announcement Thursday (Placeholder, Longhash Incubator, ChainX and Innogy Corporate Ventures).
It is unclear how many of the 500,000 DOT tokens the Chinese funds bought, but the allocation was not increased, so even if all the other investors in the sale paid full price, it would stand to reason that proceeds fell shy of the target.
That said, some people close to the project have argued that the prices paid by the three Chinese funds do not reflect the market valuation, on the logic that investors can get discounts for buying in bulk or being otherwise valuable partners. Such investors may record the tokens on their balance sheet at full value, even if they paid less for them, the argument goes.
All’s well that ends well?
Wood indicated he was happy with the outcome.
“I have been struck by how much interest there is in Polkadot – many of us have sensed an immense hunger for something new to explore,” he said in a statement. “With this success, I look forward to seeing the W3F team put these resources to good use, supporting both Polkadot and the broader Web 3.0 ecosystem.”
Polkadot aspires to build a blockchain network that can enable other blockchains to work in conjunction with each other. The foundation says it expects to launch the network by the end of the year, with steps required to launch the network to begin in Q3.
Chris Burniske, a partner at Placeholder, said in Thursday’s statement that Polkadot “represents a new frontier for experimentation and creation in cryptoland. … We expect Polkadot to not only develop a robust internal ecosystem, but also to become a bedrock network for the entirety of crypto.”
Previously, Web3 Foundation raised $145 million through a public sale of half the total 10 million supply of DOT in October 2017, valuing the tokens around $30 each.
Gavin Wood image via CoinDesk archives