VCs Involved In Huobi’s Ecosystem – Bitmain and DraperDragon Innovation Fund Among 45 Others
A little over a month ago, we described the role of HADAX within Huobi’s ecosystem. However, we would like to elaborate on the role Super Voting Nodes have, and what the incentives are for investment firms to join Huobi’s network. In essence, the nodes are Venture Capital (VC) firms which assess projects and vote on the ones which are to be presented for public votes. Their responsibility is to ensure that projects presented for the public voting are compliant with regulations and have a minimum quality standard – reducing investment risks as professional due diligence has been conducted before listing. Needless to say that the inclusion of VCs into Huobi’s ecosystem is great for Huobi Token (HT), as the Super Nodes need to lock a minimum of 1 million HTs, reducing the supply. Users who wish to trade on HADAX can do so by clicking here.
The advantages for VCs to join Huobi’s Super Node Network
First and foremost, super nodes have the possibility of using Huobi’s network to reach high-quality projects, enabling them to review projects which might not have been presented to them in the pre-ICO stage, or to be introduced to projects developed through Huobi’s blockchain industry fund. With hundreds of whitepapers being published each week, and several ICOs conducted each day, being in a network of investment firms is clearly an added advantage, as it enables the VCs to distribute the work among themselves. Additionally, with Huobi having acquired a large knowledge on the Asian, and especially Chinese blockchain ecosystem, VCs can acquire an invaluable edge on Chinese cryptocurrencies in comparison with investment firms outside the network.
Secondly, projects recommended by Super Nodes have priority in the preliminary review conducted by Huobi. This means that the ICOs which Super Nodes have participated in have a higher likelihood to be presented to the public and to be listed on HADAX. Moreover, by being presented to the public, projects benefit from an increase in public awareness, and therefore in potential Return on Investment, as the blockchain ecosystem depends heavily on network effects.
Additionally, if all nodes vote in favour of a project, this project is reviewed by Huobi to be directly listed on Huobi.Pro, Huobi’s main exchange, without the need for public voting. Lastly, from time to time Huobi will cast “Super Nodes Special Voting Sessions”, where the nodes will vote for projects to be directly listed on HADAX, without having to go through the public voting. In essence, being part of the Super Node network allows for companies to have a higher likelihood of seeing their projects listed on Huobi or HADAX.
Lastly, it allows for VCs to participate in marketing, networking events, and conferences – enabling them to increase their brand awareness, reach more companies at the seed stage, participate in panel discussions, and recruit skilled workers.
Super Node: Bitmain
One of the most prominent Super Nodes is Bitmain, the Chinese firm dominating the bitcoin mining industry, with 70 to 80% of market share in this domain. Bitmain’s core business is the production and sale of crypto mining hardware, primarily the so-called AntMiners. These miners are ASICs (Application-Specific Integrated Circuits) which are processing units designed to perform a specific task extremely well, in this case, for cryptographic computation. To demonstrate the “size” of this operation, in 2017, the company generated a profit of between $3 to $4 billion, according to estimates from Bernstein Research – as much as Nvidia. Another part of Bitmain’s business is the operation of mining pools (Bitmain businesses are listed in grey in the figure below). However, due to the mining regulatory framework in China being uncertain, the company decided to diversify itself from its core business, by first developing chips specialised for AI computing, and secondly, to become a major player in the VC space.
For instance, the company unveiled its plan to invest in 20 to 30 startups that will use blockchain technology to issue private currencies, evolving in legal frameworks. To this extent, Bitmain led the series-E $110 million round in Circle, the Goldman Sachs-backed FinTech start-up, which unveiled their plans to launch a USD-pegged cryptocurrency named USD Coin (USDC). Through the use of this coin, Circle aims to connect digital wallets from all around the world, such as Circle Pay, Alipay, WeChat Pay, and Apple Pay, allowing for frictionless global transactions and settlement between different types of digital currencies. The company also invested in SwissBorg, a wealth management platform which just raised $50 million in its ICO.
Super Node: DraperDragon Innovation Fund
The second fund we would like to introduce is the DraperDragon Innovation Fund, part of Draper Venture Network (DVN). DVN funded more than 600 portfolio companies and currently has $1.8 billion assets under management, with some projects in the blockchain ecosystem, such as APEX, Ledger, and VeChain. To provide an idea of the ventures that DVN usually invests in, below are some of the existing companies – especially of note are Skype, Baidu, Twitter, Yammer, and SolarCity.
The DraperDragon Innovation Fund is a part of the DNV but is not run by the same management. Therefore, you should not extrapolate too much on the performance of the former from the latter. However, the company makes use of the vast resources and capabilities developed by DNV, has substantial experience and knowledge in investing in innovative companies across all industries, and has Tim Draper himself as a special limited partner. To see some of the companies held in Draper Dragon’s portfolio, please see the fund’s official web page. Some of the projects for which the DraperDragon Innovation Fund cast their votes for on HADAX are: High Performance Blockchain (HPB), Bottos (BTO), and DATx, among others.
The full list of nodes is available here: https://www.hadax.com/vote/node_list/