Blockchain token exchange Polychain receives $10 million in funding led by A16z, Boost VC and USV

Polychain Capital, a startup focused on blockchain asset trading, has raised $10 million in funding from Andreessen Horowitz (A16z), Boost VC, Union Square Ventures (USV), and other undisclosed investors.

Polychain Capital, led by Coinbase veteran Olaf Carlson-Wee, plans to invest in so-called ‘protocol tokens’ or alternative assets that, like bitcoin, have both an underlying protocol and a tradable asset that manages access to a digital ledger or application.

Speaking to Coindesk, Carlson-Wee explained that the funds will be used to seek to provide investors with an actively managed portfolio of blockchain assets.

Notably, Carlson-Wee attributes the funding to the success of altcoin blockchains, such as Ethereum, which have seen huge price growth but have not benefited traditional venture capitalists.

Carlson-Wee said:

“I think these tokens are very important because they directly make open source founders and founding teams very profitable at the protocol level. We have seen many founders of blockchain networks make a lot of money by creating tokens.

Carlson-Wee said Polychain will not disclose its investments, but they will not use their potential market position to influence day-to-day market trends.

“I will target projects that I believe can truly become the infrastructure of the future Internet or APP tokens that can subvert important centralized network services.

This is the latest joint investment by A16z and USV, marking a turning point in the business model of blockchain technology.

The two firms have jointly invested in a number of startups in the past, including decentralized e-commerce marketplace OpenBazaar and metadata protocol Mediachain for content sharing.

According to Coindesk, ICOs, or public token sales, have raised nearly $200 million in 2016, with the failed DAO alone accounting for the lion’s share (nearly $150 million).