Coinbase Ventures Started Backing a Polkadot-based DeFi Project

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Coinbase Ventures Started Backing a Polkadot-based DeFi Project

Apr 5
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Image: Yury / Adobe Stock

In brief

  • Coinbase Ventures, the investment arm of Coinbase exchange, decided to support new DeFi projects.
  • The projects in question are Polkadot-based Acala, and Kusama-based Karura.
  • Both projects are focusing on building up the DeFi ecosystem, and are close to being launched.

Coinbase Ventures recently started backing two projects, one of which is based on Polkadot and the other on Kusama, while both aim to create strong ecosystems for DeFi.

The growth and development of DeFi continue strongly in 2021, with the sector attracting more attention than ever. Recently, even Coinbase Ventures — Coinbase Exchange’s investment arm — decided to delve deeper into the DeFi sector, and even back a few specific projects — Polkadot-based Acala and Kusama-based Karura.

Coinbase Ventures backing new DeFi projects

The first of the two projects, Acala, is an Ethereum VM-compatible project that is building a host of DeFi capabilities on Polkadot. The project already created four core products on Polkadot, including a stablecoin, an AMM DEX, a sovereign wealth fund, and liquid DOT staking. The second one, Karura, is a similar project that is creating a DeFi ecosystem on Kusama.

It was not revealed what amounts the projects received from Coinbase Ventures, but what is known is that both blockchains are near the auction phase for their first parachain slots.

Meanwhile, Acala’s VP of growth, Dan Reecer, said that Acala and Karura are both launch-ready, meaning that users will be able to start using their apps as soon as they launch. However, there are a few more steps to be taken before this happens, as Reecer explained. He specified that Acala’s team needs to incorporate community support, as well as to win a parachain slot auction on Kusama to launch Karura. Then, they will also have to get a parachain slot auction on Polkadot, in order for Acala itself to launch.

Coinbase Ventures knows how to pick

Being backed by an investment arm of the largest exchange in the US, and one of the largest ones in the world is a big achievement for these projects. Coinbase Ventures has supported plenty of projects in the past, too, and they mostly turned out to be very successful. As such, the fact that Coinbase Ventures is backing these projects indicates that there is real potential in them.

Both Kusama and Polkadot have been attracting attention from retail investors throughout the past year, and Polkadot even managed to climb to the top 10 largest coins by market cap. It performed better than Kusama, which is still high, but sits as the 32nd largest coin.