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$400M Web3 Fund Shuts Down New Investments Amid Crypto Market Concerns

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$400M Web3 investment fund ABCDE halts new investments, fundraising

Investment fund ABCDE, which specializes in Web3 and blockchain, has decided to stop accepting new investments. However, they continue to stand by their current initiatives, with a total commitment of $400 million.

According to a statement made by Du Jun, co-founder of ABCDE and founder of Huobi exchange, on April 19th, the fund they manage, worth approximately $400 million, will cease investments in new projects and will not raise capital for its second phase.

Instead, Jun mentioned that the fund would maintain “follow-up assistance and exit strategies for ongoing projects” to uphold its dedication towards entrepreneurs and investors (LPs).

Jun plans to transition his professional focus from investing in financial markets initially to a strategy that combines investment and deep incubation, with an emphasis on industrial compatibility and generating long-term value.

Approximately three months following ABCDE’s latest investment in an Ethereum layer-2 (L2) solution, Soon (Solana Optimistic Network), which successfully raised $22 million during a non-fungible token sale to commence its mainnet launch as reported by CryptoMoon on January 22, the company has now made another announcement.

In essence, the primary network of Soon boasts faster performance and greater efficiency than Solana, consistently achieving average block times as quick as 50 milliseconds, while Solana typically takes about 400 milliseconds per block.

Approximately $112 million of the ABCDE fund is allocated to Bitcoin (BTC) scaling technology, making up around 28% of the total investments. Similarly, about $64 million, or 16%, is invested in Ethereum liquid staking derivatives finance infrastructure. Furthermore, an additional $48 million, representing 12%, is placed in L2s, restaking, and smart contract platforms. According to Cryptorank, the remaining funds are distributed elsewhere.

In the last three years, company ABCDE has poured more than $40 million into approximately 30 different ventures, maintaining a top-tier internal rate of return even amidst present market conditions, as reported by Jun.

New incubator brand Vernal announced

ABCDE temporarily halted its fundraising activities about a month following the launch of co-founder Vernal’s new business venture, an incubator called Vernal.

In May, the newly established incubator plans to reveal its initial investors and guidelines for selecting projects (first batch) as well as make its inaugural investments.

Jun explained that the pause in ABCDE’s fundraising wasn’t due to money issues, but rather stemmed from a deep worry about the present direction of the cryptocurrency sector’s growth and development.

Jun expressed in a recent post on April 19th that he finds it harder and harder to concur with the existing environmental conditions in the main market. In simpler terms, he’s having difficulty supporting the current state of ecological issues within the primary market.

“Many projects are extremely short-sighted and only think about how to get listed on the exchange as soon as possible, and what is left behind is often a mess.”

As an analyst, I find it concerning that certain key investment funds seem to pay little attention to the underlying value of their projects, instead focusing on short-term market performance and the hype surrounding their ‘listed projects’. Unfortunately, they often neglect to discuss the actual value creation these projects bring about.

Charles Hoskinson, the founder of Cardano, encourages the creators of fourth-generation cryptocurrencies to adopt a more cooperative approach to their economic systems in order to effectively challenge large, established tech companies that are moving into the cryptocurrency sector.

Currently, the challenges in the cryptocurrency sector lie in the fact that the token economics and market structure are inherently competitive rather than collaborative. Hoskinson stated this during Paris Blockchain Week on April 9. To overcome these issues, it’s essential to identify tokenomics and market structures that foster a cooperative balance instead of instigating conflict.

He also pointed out that it’s not feasible to establish a worldwide network like this, nor achieve victory using this approach. The reason being, the existing players in the field are significantly bigger.

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2025-04-19 13:28

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