Funding Wrap: Franklin Templeton backs Bitcoin L2 Bitlayer

This week, Galaxy Ventures unveiled a new fund aimed at early-stage crypto firms, while the markets saw over $75 million flow into various projects around the crypto ecosystem.

Some of the project funding came from major traditional finance players, while ex-Coinbase employees raised more funds to focus on onchain gaming. 

First up is Bitlayer. The layer-2 blockchain raised $11 million in a Series A round, boosting its valuation to $300 million. 

The funding round was led by Franklin Templeton, a traditional finance giant known for its bitcoin and ETH ETFs, along with investment fund ABCDE.

Read more: 9 US spot ether ETFs go live after landmark approval

Bitlayer said it’s the “first Bitcoin [layer-2] infrastructure project to receive strategic investment from an ETF-licensed institution.”

“We believe that Bitlayer’s unique approach and technology has the potential to unlock new use cases and opportunities for Bitcoin, and we look forward to exploring collaboration opportunities with our Bitcoin-focused financial products. This investment underscores our commitment to supporting innovation in the digital asset space,” Kevin Farrelly, managing principal at Franklin Templeton Digital Assets, said in a statement.

Read more: Bitcoin’s zero-knowledge future gets a test

GSR Ventures, Stake Capital Group and FalconX also participated in the round. 

Kintsu, a liquid staking protocol in the DeFi space, raised $4 million in a seed round led by Castle Island Ventures. Other participants in the round included Brevan Howard Digital and Animoca Ventures.

“We wanted to make sure, at the core of Kintsu, it was not only a force that was creating massive liquidity in the base layer for Monad, but that it was also encouraging decentralization,” Kintsu founder Stephen Novenstern told Blockworks.  

“So right in the center of our architecture, there’s what we refer to as the validator registry contract, which is quite simple. It’s a list of validators and the weights they each get. This gets completely controlled by the DAO and allows…validators permissionlessly [to] join the validator registry, and the DAO can control the weights — effectively, the percentage that goes to each validator. This kind of maximizes decentralization, even as the [liquid staking token] becomes huge on Monad,” he continued.

Other notable raises: 

• Ledger Cathay’s fund led a $7.5 million strategic round for Thesis’ BitcoinFi project, Mezo. Other participants included GSR, Flowdesk and Mantle’s EcoFund.
• Igloo, the parent company behind Pudgy Penguins, announced an $11 million raise in a round led by Founders Fund. Selini Capital and Fenbushi Capital were among participants in the round. 
• Web3 infrastructure platform Caldera said it raised $15 million in a Series A led by Founders Fund. Sequoia Capital and Dragonfly also participated in the round. 
• NPC Labs, an onchain gaming firm, announced it raised $21 million in preseed and seed rounds led by Pantera. Makers Fund and Mantle both participated in the round. 
• OpenSocial Protocol said it raised $6 million in strategic backing, which was co-led by Framework Ventures and North Island Ventures. Other participants included Moonrock Capital and Aspen Digital.*
• And special mention goes to Galaxy Asset Management, which announced Thursday it closed $113 million for a new venture capital fund. Galaxy Ventures Fund will focus on early-stage crypto companies. 

*While Blockworks founder Jason Yanowitz didn’t participate in the current round, he’s previously invested in OpenSocial Protocol.

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