Tag: The DAO

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Y Combinator alumni raise $80 million for DAO to back crypto startups

Groups of people seeking to invest together have been turning to the crypto-native DAO (decentralized autonomous organization) structure for a collective decision-making framework. While an investment DAO typically can only have up to 100 members in order to stay compliant with SEC rules, Orange DAO has found a way to bring over over 1,000 Y Combinator alumni together to back web3 startups through an associated venture fund.

Orange DAO just raised $80 million in funding, mainly from two strategic investors: layer-one blockchains Algorand and Near, general partner Ben Huh told TechCrunch in an interview.

“They wanted to support our mission of bringing more entrepreneurs into web3. For them, working with us and getting exposure in front of our entrepreneurs is really important, because if one of our members builds a billion-dollar DeFi protocol, the investment that they made in us is trivial compared to the amount of upside that they get from it,” Huh said.

The rest of the funding, he added, came from DAO members who became limited partners in the fund itself as well as some institutional investors.

Members of Y Combinator alumni's web3 venture capital collective, Orange DAO

Members of Y Combinator alumni’s web3 venture capital collective, Orange DAO. Image Credits: Orange DAO

TechCrunch last spoke to Huh in January shortly after the fund launched. Back then, Huh explained the DAO’s unique structure and why it has been able to stay compliant despite its large size.

The DAO itself is structured as an LLC, Huh said, while the fund is run as a separate legal entity by Huh and a few other general partners. That way, the fund doesn’t have anywhere near the SEC’s cap of 100 investors for a venture group, though Huh and the other GPs leverage the DAO’s hundreds of members to source investment ideas and conduct diligence.

The group had originally set out to raise $10 million in funding from investors to back crypto startups, Huh told TechCrunch this week. Since January, the group has grown to 1,300 members from 1,000 and backed 90 startups, up from 30 at that time, Huh said.

Its portfolio companies include crypto cap table management service Liquifi, decentralized credit platform Goldfinch and crypto payments tool Spritz, according to the group. On average, Huh said, the fund writes $100,000 checks to each company.

As a first-time venture fund, Orange DAO can’t rely on a prior track record to attract new capital, Huh said. Instead, he sees its advantage stemming from the network of Y Combinator alumni in the DAO who come together to help the GPs originate and diligence opportunities.

“By having OrangeDAO do the work of supporting our portfolio companies and bringing in deal flow, we’re looking at 10 times more deals than we’d normally see,” Huh said.

Legally, the DAO and the fund are separate, but the DAO acts as a “funnel for entrepreneurs to apply for funding,” Huh said. Any carry, or profits, the GPs earn on the fund is reinvested back into the DAO’s treasury to support new investments, he added.

So what are the benefits of investing through this DAO structure? Huh said members can capture upside by becoming members of the DAO and voting on what it does with its treasury without needing to be accredited investors in a venture capital firm themselves. For outside investors in Orange DAO, the appeal comes from its strong network and deal flow stemming from the connectivity to Y Combinator, though YC does not officially have any affiliation with Orange DAO.

Orange DAO also funds a fellowship program to pay ~10 Y Combinator founders to work on web3 projects for 10 weeks, with the goal of attracting more founders to the web3 space, Huh added. With the new influx of cash, Huh and his team hope to expand the fellowship program in addition to making new fund investments.

The main innovation here is the decision-making process Huh has helped formulate for Orange DAO, which he developed through his own DAO accelerator startup, Origami. Origami, which happens to be one of Orange DAO’s portfolio companies, says it also provides services to Techstars’ Constellation DAO and Kauffman Fellows’ VC3. Both operate using a similar model to OrangeDAO to make venture investments, according to Huh.

One challenge these venture DAOs face is how to distribute tokens to members for their contributions to the group, Huh said. Although Huh did not explain exactly how DAO members are compensated, he said they have their own metrics and bounties used to assess each member’s contribution.

Origami’s tech stack seeks to streamline some of the processes involved with coordinating between hundreds of group members in a venture DAO.

“This was one of the challenges of being early in a very nascent industry,” Huh said of launching Origami last year. “You have to establish best practices and turn them into really good efficient processes, so between like the legal advice, [deal] structuring advice and organizational structuring advice, our services help DAOs boot up faster and [through our] software, you’ve got a vertically integrated data system.”

Hundreds of Y Combinator alumni join crypto collective to back web3 startups

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Tencent veterans secure $13M to build cross-chain decentralized identities

There is a host of startups working on decentralized identities for the next generation of the internet. Four Tencent veterans want their offering .bit, an identity protocol built on the blockchain, to become the universal identification system in web3 like how emails and phone numbers became ubiquitous in web2, while giving users control over their own data rather than letting it reside in the platforms they use.

.bit-powered identities come in the form of its namesake domain name. This is how it works: pick a .bit alias, link it up with the addresses of your crypto or NFT wallets that .bit currently supports, and all the data and assets from those wallets will now sit under .bit’s “data container” and be displayed on your .bit page.

Say you need to receive cryptocurrencies from someone. Instead of giving them your 35-character wallet address, you could give them something as simple as claire.bit.

The Ethereum Name Service (ENS) is probably the biggest player in the blockchain naming system space today with .eth increasingly seen in Twitter names. While .bit sees ENS as its rival, it doesn’t bill itself as a domain service but rather as an identity solution provider.

Furthermore, Tim Yeoh, one of .bit’s co-founders, said his company provides a “neutral” and “chain-agnostic” solution whereas .eth interacts with only Ethereum.

“In real life, your houses and financial assets are all tied to your unique ID number. .bit serves as the digital ID for all your assets in the web3 world,” said the founder.

One year after its founding, .bit has registered more than 110,000 accounts with some 38,000 crypto addresses tied to them. The identity protocol now supports Polygon, Tron, Binance Smart Chain, and Ethereum; it plans to add compatibility with Bitcoin, Dogecoin, Polkadot, Solana, and more down the road. All in all, the protocol has integrated with nearly 100 wallets and dApps.

Its business model is simple: charging an annual subscription fee for the accounts, including the domain names and other identification services. The strategy won investor support

as the company has closed a Series A funding round of $13 million led by CMB International, which is owned by the Chinese conglomerate China Merchants Group, HashKey Capital, known for its early investment in Ethereum, QingSong Fund, GSR Ventures, GGV Capital, and crypto-focused investment firm SNZ. 

The startup plans to spend the capital on expanding partnerships, developing its user community around the world, and hiring — though it wants to keep the team small and nimble.

The company’s next ambition is to promote the use of .bit for decentralized autonomous organizations (DAOs), said Yeoh. Every member of the DAO gets assigned their .bit account and can use that piece of identity to vote on the organization’s decisions.

The startup comprises a small team of ten people spread across the U.S., China, and Singapore, led by four co-founders who were colleagues at Tencent — Tim Yoeh, Specer Shaw, Jeff Jin, and Kyle Wright.

Its users already span some 180 countries, but Yeoh wants the company to reach more users in Africa and South America, where a large proportion of the population remains unbanked due to their lack of government documentation.

“A person who doesn’t own an official ID can get a .bit account, skip the government, and start using a range of apps,” the founder suggested. “If a person makes a contribution to a DAO, that record can be reflected on their .bit profile. There’s no need for certificates anymore.”

Similar to .eth, .bit has been gradually gaining recognition among crypto adopters on some established internet platforms. On Jike, a social network favored by China’s tech workers, venture capitalists, and web3 enthusiasts, people are attaching the .bit suffix to their names even if they haven’t actually registered an account with the platform.

“They are treating .bit as a form of social cachet,” said Yeoh.

Web3 digital identity startup Unstoppable Domains raises funds at $1B valuation

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VC-backed DAO startups are racing to define what DAOs actually are

Amid the growth in web3, NFTs, DeFi and tokens, institutional investors are also looking at how they can leverage another crypto structure called DAOs to build a new model for community action on the internet.

DAOs — or decentralized autonomous organizations — are at a very weird place in 2022.

The crypto collectives theoretically are designed around allowing groups to make decisions and operate in a structured capacity governed by smart contracts and blockchain transparency, but DAOs that are popping up recently seem to be indistinguishable from each other with varying commitments to both decentralization and autonomy. While some camps have focused on how DAOs can be used as autonomous governance mechanisms for technologies like DeFi protocols, others are using them to make collective decisions for NFT project roadmaps, while some see the structure simply as a new way to add a crypto treasury to their Discord or Telegram group chat.

The reality is that few people have a tight definition for what DAOs are, leaving room for new organizations to help the crypto-curious make sense of them and help would-be DAO founders make the most of the structure. Founders in the space say that the difficulty in pinning down a catch-all definition for what a “standard” DAO should look like only highlights how broad the opportunities are.

“At the end of the day, DAOs are a collective technology as opposed to an individual one,” Syndicate co-founder Will Papper told TechCrunch last week. “DAOs are kind of the next evolution of the corporation because they encode both voice and exit into their foundations.”

Crypto startup Syndicate looks to demystify DAOs with ‘Web3 Investment Clubs’ product

This past week, TechCrunch covered the launch of a16z-backed Syndicate’s play to help people build out fully compliant crypto “investment clubs,” with a network of smart contracts designed to help users build a lasting stable structure to invest alongside their friends.

Venture-backed startups are looking to help embolden a new generation of DAOs which have varying degrees of blockchain dependencies, enabling founders to use their platforms to navigate regulatory hurdles while relying on smart contracts that these tooling startups have created.

DeepDAO, a dedicated DAO analytics firm is currently following more than 4,100 DAOs. The groups have evolved considerably since the first-ever DAO, called The DAO, was founded back in 2016.

“It was a very specific, narrow use case that inspired the whole concept of The DAO and set up the industry. Now, essentially the second generation of DAOs use the word completely differently — for them it’s an organization that uses blockchain as a system or record for ownership,” SuperDAO founder Yury Lifshits says. “Any organization that defines who owns it on the blockchain is a DAO, so that does not require that the governance is defined by smart contracts and it doesn’t say that the governance is decentralized.”

SuperDAO just closed a $10.5 million funding round led by SignalFire at a $160 million valuation.

Venture capitalists are backing startups building blockchain infrastructure for DAOs but firms like Andreessen Horowitz and “crypto-native” funds like Variant and Paradigm are increasingly backing the DAOs themselves, which often are also looking to productize the backend infrastructure they built to get up-and-running initially.

“The fact that a DAO is just software that can can be spun up with the click of a button… but can catalyze thousands or tens of thousands of people — eventually we expect millions of people or larger numbers — that all put together capital and put together ideas to work together for some common goal… we see that as almost the purest vision of what web3 and crypto are all about.” a16z GP Ali Yahya told TechCrunch in an interview accompanying the firm’s investment in PleasrDAO.

Andreessen Horowitz backs NFT investor group behind rare Wu-Tang Clan album purchase

Syndicate and SuperDAO are just a couple of the venture-backed players in the DAO infrastructure space. Other startups like Utopia, Tally, Colony and Layer3 have nabbed VC funding on the promise they can surface new opportunities — some helping people form DAOs more quickly while others prioritize helping users discover them in the first place.

One of the largest areas where tooling startups are focusing attention is in helping DAOs stay compliant with U.S. regulations, incorporating as LLCs or seeking out the right structure for what exactly the DAO is aiming to do. Investment DAOs where crypto rich buyers team together to make investments or back startups as a group have faced challenges stateside navigating fairly clearcut rules laid out for pooled investment groups among non-accredited investors.

“My prediction is that investment DAOs will continue to flourish outside the United States, but in the United States the legal system is pretty robust and there are relatively solid alternatives in terms of SPVs and rolling funds,” Lifshits says. “It’s on the edge whether investment DAOs in the U.S. will win against traditional investment vehicles.”

Hundreds of Y Combinator alumni join crypto collective to back web3 startups

Larger investment groups like Orange DAO, which has more than 1,000 members, are relying on more complicated structures which loosely tie DAO activity to a separate venture fund which is structured as a more traditional vehicle.

While some of the largest DAOs including BitDAO, Uniswap and Lido focus on pooled investment opportunities in DeFi, DAO acolytes see endless opportunities for the web3-native structure to reshape everything from how creators and artists monetize their work to how the neighborhood HOA of the future operates. Though compliance presents an ever-evolving suite of challenges, the most persistent landmine for DAO tooling startups has been helping DAOs to educate their users on potential threats– something that will only become more important as crypto startups and DAOs look to entice an increasingly mainstream user base.

“There have been DAOs that I’ve been a part of that have accidentally sent millions of dollars worth of tokens to the wrong address and then they were just lost forever,” Papper says “We have a lot of protections in place to help users, but there’s always a tradeoff between the protection we give them and the flexibility.”

Utopia Labs is building an operating system for DAOs

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Crypto startup Syndicate looks to demystify DAOs with ‘Web3 Investment Clubs’ product

Over the past year, crypto acolytes have aimed to sell the world on an internet transformed by tokens and NFTs. All the while, a smaller subsection has pushed DAOs, or decentralized autonomous organizations, as a way to transform democracies and revamp stodgy organizations for an online age. Both groups have struggled with messaging and stateside legal guidelines, but the technical challenges for onboarding new users has been particularly strong for those looking to build their own DAO.

Syndicate, a DAO services startup which raised $20 million from Andreessen Horowitz last year, is looking to simplify the DAO creation process (as much as legally possible) with the launch of their new product called “Web3 Investment Clubs.” The tooling allows users to spin up a group of up to 99 participants, pool their capital and vote as a group on where to invest those funds.

Syndicate co-founder Ian Lee tells TechCrunch that the product offers users the ability to form a DAO with the “peace of mind to help maintain compliance and do the right thing for their their members.” The startup’s wider goal is to make forming these groups and investing in tokens and NFTs collectively as “easy as a group chat.”

The “investment club” branding is part of an effort to demystify DAOs for a broader group of users — in this case investors — and create an alternative path for users that may have been considering the formation of a similar investment vehicle using more traditional non-crypto financial services. The startup’s step-by-step guide to setting up a DAO showcases just how complicated the weave of services still can be for those less familiar with crypto best practices, but also how quickly one can form one of the groups if they can breeze through the technical onboarding.

In addition to the setup guidelines, Syndicate offers a dashboard where users can peruse the holdings of their club and past activity.

Image via Syndicate

Syndicate is aiming to make these clubs flexible for users depending on their specific situations and tolerance for legal ambiguities. Certain guidelines exist for accredited and non-accredited users as well as DAOs that have members in the United States. The startup offers up basic guidelines that prospective club admins should be aware of — for clubs comprised of unaccredited investors in the U.S., every member most vote on every decision — but leaves the implementation up to end users. Syndicate’s suite of smart contracts can walk users through the process of formalizing their club with a legal entity and handling things like setting up a bank account and getting tax forms to ensure stuff stays above-board.

Syndicate is looking to position itself at the center of the DAO infrastructure ecosystem and get as many curious users familiar with their offerings. As such, this new service is free and Syndicate isn’t charging any fees for setup or maintenance.

Hundreds of Y Combinator alumni join crypto collective to back web3 startups

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Hundreds of Y Combinator alumni join crypto collective to back Web3 startups

A crypto collective backing Web3 startups is seeking new members. The only condition for joining? Applicants must be alumni of the Y Combinator accelerator.

The group, called Orange DAO, is an effort to build out a venture structure which can scout out and back young crypto startups. It was formed this fall with a few dozen YC alums, but has grown in recent weeks to attract over 1,000 YC founders. The collective wants to use the crypto-native DAO formation to better incentivize its growing network to source deals.

“Orange DAO will help startups apply to, and be accepted into Y Combinator, provide them with pre- and post-YC funding, while helping mentor their leadership and recruit talent, and acquire customers,” Orange DAO’s official charter reads. “And we will do it responsibly and equitably by becoming a DAO governed by its members because our hive mind is greater than any single ape brain.”

Has Y Combinator’s new deal changed the early-stage investing game?

The 1,000 founders now in Orange DAO’s Discord chat represent a sizable chunk of the total volume of YC founders — Y Combinator has backed over 3,300 companies since launch. The effort is co-led by Ben Huh, who has co-founded a handful of startups and helped lead YC’s New Cities initiative back in 2016. Y Combinator is not formally involved in the project, the accelerator tells us.

“It’s crazy to think about an alumni group that becomes its own entity that is for-profit and generates wealth for its members, but that’s exactly the state of the world we’re in,” Huh told TechCrunch in an interview. “We think that these groups will serve as a buying power as well as validation… So, if 1,000 YC alumni choose a specific service provider or toolset to use, it must mean that it’s actually quite good because these people build for a living.”

After founders verify themselves by posting their crypto wallet address to their YC-linked HackerNews profile, each member can mint a non-transferable NFT that verifies they are indeed a previous YC founder and are now an NFT-carrying participant of Orange DAO. Orange DAO isn’t the first effort to build an alumni fund that taps into the networks of well-connected YC founders. Back in 2017 a group of a couple hundred YC alumni helped form the Pioneer Fund, a more traditional venture effort to tap into the expertise of past YC founders to win deals. 

DAOs, or decentralized autonomous organizations, are groups that leverage blockchain tech to help multiple users make decisions as a single entity. Throughout the crypto bull market, they’ve become a popular way for users to band together to buy expensive NFTs or other objects. In November, a DAO called ConstitutionDAO generated excitement around its ultimately failed bid to buy an original copy of the U.S. Constitution. DAOs are also used by crypto projects and protocols to create decentralized governance structures to vote on key decisions.

ConstitutionDAO’s bold crypto bid for US Constitution falls short

“At the end of the day, DAOs are a collective technology as opposed to an individual one,” Syndicate co-founder Will Papper tells TechCrunch. “DAOs are kind of the next evolution of the corporation because they encode both voice and exit into their foundations.”

DAO startup Syndicate helps the groups get off the ground and navigate complex regulatory issues. Papper helped the ConstitutionDAO team navigate the intricacies of their Sotheby’s bid and also helped guide Huh’s efforts in early conversations around Orange DAO.

Orange DAO’s structure is a bit unusual, part of an effort to experiment with the organization type while staying compliant with securities law. The DAO itself is an LLC, while the fund which actually backs startups is a separate legal entity called Orange Fund, which is run by Huh and a couple other general partners. That entity has already closed an initial fund and invested in about 30 startups including DeFi startup Goldfinch.

“We figured out a way to kind of combine the investing entity structure and then the DAO structure — they’re still separate but they work together,” Huh says “I think where we want to be headed is: do as the smart contract says.”

The DAO itself is run through committees — an effort to organize the 1,000 members into smaller working groups.  A fundamental element of OrangeDAO’s structure will be finding ways to reward members who do more work on individual deals by awarding them internal governance tokens, Huh says. The group is a bit opaque on how performance from the fund will translate to returns for DAO members though Orange Fund’s GPs will be contributing their carry in the fund to the Orange DAO’s internal treasury.

The effort was initially branded the “YC Crypto DAO,” but as its ambitions have scaled, the group has taken efforts to adopt its own unique brand leading to its new name and a new mascot — a glasses-adorned pixelated citrus fruit bullishly nicknamed “Juicy Returns.”

Goldfinch raises $25M from a16z to power its DeFi lending protocol for borrowers in developing countries

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Utopia Labs is building an operating system for DAOs

Decentralized Autonomous Organizations, or DAOs, are all the rage at the moment. We’re seeing explosive growth in this sector as people experiment with building companies on top of tokens and smart contracts. And where new organization types bloom, so does the need for infrastructure.

Utopia Labs is a team of 4 founders who met on Discord and Twitter over the past few months — a story that is getting increasingly familiar in the crypto-driven web3 space where everything is moving incredibly fast at the moment.

The CEO Kaito Cunningham recently worked at crypto firm M31 and is in the On Deck Catalyst program. Utopia’s co-founders Pryce Adabe Yebesi, Alexander Wu and Jason Chong, also have held a scattering of tech builder background gigs from Facebook internships to LunchClub to Microsoft. The collective interest in DAOs, though, was what brought them together to begin chatting and eventually building for the space. 

If you’re not familiar with the DAO explosion happening, what we’re seeing is communities come together around a thesis that in the past may have required an LLC or C-corp structure in order to execute instead turning to blockchain solutions. Basically, company structure governed by a smart contract instead of legacy legal structures. Some current estimates put the value governed by DAO treasuries at over $6B, up from $1B earlier this year. 

If you plot the curve, you’ll see the potential for growth is pretty enormous. And with the vast majority of DAOs operating across international boundaries on a global scale, there is a big need for infrastructure build out that takes over where the contract ends, nemly in areas like payroll, expenses, token distribution and HR management. 

Utopia Labs is building out a stack of infrastructure tools for DAOs and they’re starting with the payments bit. They’ve raised $1.5M from a group of investors to begin hiring a full stack engineer and front-end engineer.  

The round was led by Kindred Ventures who has invested in other bleeding edge crypto platforms like Zora and Bitski. Other investors participating include Syndica DAO, 4th Revolution Capital and angels like Trevor McFedries at Brud, Alex Zhang at Friends With Benefits (another major DAO), Tyson Battistella from Zora, Anirudh Pai at On Deck, Colin Goltra at Binance, Gabby Dizon from YGG, Jason Choi from Spartan Fund, Jeff Weinstein from Stripe and several others.

If all of this sounds incredibly bleeding edge, it is. The team literally founded the company earlier in September — yes, the month that we are at the end of currently. They saw the opportunity to build out in this space that has energized the web3 space and dove in. 

Many DAOs pay members in their own tokens, increasing ownership stakes to provide members with an opportunity for greater rewards down the line or immediate liquidity. Utopia is building right on top of Gnosis SAFE, the financial core of most DAOs. The V1 product is focused on member payments and invoice workflows. 

The vast majority of DAOs are operating token distribution and payments based on raw dumps of data. As the saying goes, where you see a CSV, there’s a business opportunity. 

The team says they’ve build invoices and reimbursements workflows so that DAOs can receive, pay out and manage invoices and reimbursement requests. They’ve also built all-in-one transactions to allow DAOs to batch payments in one transaction across multiple people and coins. 

Next up is financial analysis and accounting to attach labels and metadata to payments in order to avoid manual accounting via Etherscan dump. 

The forward looking roadmap includes traditional fiat currency services, cross-chain DAOs, real-world compliance workflows and DAO ecosystem partnerships. 

The world of DAOs is currently on fire, with dozens of viable organizations that have significant momentum — but not nearly enough infrastructure to make them truly efficient. It’s a truly interesting and diverse landscape that has come a long way since The DAO nearly derailed Ethereum back in 2016. Today’s DAOs are more company scale than network scale but are moving faster and building cooler things than containers for money.

“On-chain payroll make DAOs truly crypto-native,” says Cooper Turley, a co-founder of FWB and full-time DAO explorer. “In a world where dozens of members are contributing from every corner of the world, automating salaries, incentives and bounties are the only way in which DAOs can scale.”

In addition to what Utopia Labs is doing, Multisafe, Commonwealth, Parcel and Colony are all names to watch in the DAO infrastructure space. 

 

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Signalling that privacy is coming to DeFi, Sienna Network raises $11.2M for its platform

Last week we saw some major backing of the Secret Network blockchain, as significant blockchain players Arrington Capital and Blocktower Capital invested in the privacy-first smart contract platform. What this is signaling is the rise of privacy-oriented financial blockchain projects, which are crucial if “DeFi” (decentralized finance) is to have any kind of future. We have come to expect privacy in our ’normal’ financial lives, so we will expect it in the blockchain world.

Today there’s a new signal that this privacy movement in DeFi is taking off with the announcement from privacy decentralized finance company Sienna Network that it has raised $11.2 million from institutional investors and its public supporters. Of that raise, the private token sale raised $10 million from investors including NGC, Inclusion Capital, Lotus Capital, FBG, Skyvision Capital and others. It also raised $1.2 million on the DaoMaker and Polkastarter exchanges.

Sienna Network is built on the afore-mentioned Secret Network, and pitches itself as a privacy-first and cross-chain decentralized finance platform allowing asset holders to switch to privacy-oriented tokens.

Sienna is one of an increasing number of blockchain startups tackling the industry-wide problem of ‘front-running’. This – says Sienna – is where bad actors hijack future trades on public DeFi blockchains.

Monty Munford, chief evangelist and core contributor to Sienna Network said: “Sienna helps access to the privacy-preserving blockchain in a user-friendly way due to the blockchain’s inherent privacy design. Sienna saves no login information, no wallet data, no transaction data, or anything else. It does not even track its website or give any information to any Third Party.”

Here’s how a front-running scam works: A transaction on Ethereum can be preempted by someone else simply by them paying a higher transaction fee. It’s the close equivalent in the real world of trumping a trade on the stock market, just because you paid a higher fee to a broker. In other words, it’s a disaster if it continues to happen, and the entire infrastructure of decentralized finance is threatened because of this threat.

Commenting, Tor Bair, CEO Secret Network said: “We believe Sienna will be a key pillar of Secret DeFi and help drive mass adoption of a more secure decentralized financial ecosystem.”

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Coinbase now supports buying and selling Ethereum Classic

Coinbase has added a new buying option for its customers after the crypto exchange introduced Ethereum Classic to its collection.

The addition was first announced in July but Coinbase took its time to implement its newest addition following criticism over the way it added Bitcoin Cash last year. Allegations of insider trading led the company to investigate the incident which saw service outages and wild price fluctuations for Bitcoin Cash right after its addition to the exchange. It later introduced a framework for adding new tokens.

Nonetheless, Ethereum Classic’s value spiked 20 percent on last month’s news. Today, though, it is down two percent over the last 24 hours, according to Coinmarketcap.com.

Coinbase has taken a conservative approach to adding more crypto. Today’s addition takes it to five tokens — Bitcoin, Ethereum, Litecoin and Bitcoin Cash are the others — but that’s likely to change this year. Last month, it announced it is “exploring” the addition of another five tokens while CTO Balaji Srinivasan hinted that the selection would grow further when I interviewed him at the recent TechCrunch blockchain event in Zug.

“We hear your requests, and are working hard to make more assets available to more customers around the world,” Dan Romero, who heads Coinbase’s consumer business, said in a blog post published today.

A note on Ethereum Classic — it was created in June 2016 following a major hack on The DAO, a fundraising vehicle for the project. In short: the Ethereum Foundation created a new version of Ethereum — known today as Ethereum — that rescued the lost funds, while those who opposed continued on with the original chain which was known as Ethereum Classic.

Ethereum’s falling price splits the crypto community

Note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.