Crypto Market News

Andreessen Horowitz Backs Maker (MKR) With $15M Investment

Andreessen Horowitz Continues Crypto Investment, Backs Maker Project

Andreessen Horowitz, one of the foremost venture capitalist firms in the world, has just announced that it is continuing to invest in the nascent crypto industry, despite the recent, violent downtrend that a majority of publicly-traded tokens underwent.

Per a Medium blog post pertaining to the subject, Andreessen or a16z’s crypto fund has just made a $15 million U.S. dollar investment into the Maker blockchain project via the startup’s Ethereum-based MKR token. This substantial investment sees a16z crypto picking up 6% of the total MKR token supply for the aforementioned investment.

For those who are unaware, Maker, a relatively new, yet well-established project, offers the first fully-fledged decentralized stablecoin, named DAI, which is backed by a system that has the first “formally verified smart contracts on Ethereum (or any blockchain [for that matter]).”

Like Tether, Maker’s DAI is tied to the value of a single USD and uses a complex collateral and loans system to maintain the value of the stablecoin. And while the system backing it may seem complex, Maker and its stablecoin offering have already seen solid levels of adoption, with there being 55 million DAI tokens in existence, as it continues to compete with similar USD-tethered tokens.

While DAI is stable, it evidently doesn’t make a great investment, as it’s designed to stay at the value of a single USD at all times. Keeping this in mind, the California-based fund decided to invest into MKR tokens, which will allow a16z to participate in the governance system of MakerDAO and the DAI Credit System, which facilitates the MKR and DAI ecosystem.

This move to “strategically” purchase thousands of MKR tokens, which are currently valued at $450 a piece, is one of the first from a16z crypto, the recently-established, dedicated cryptocurrency-focused fund from Andreessen Horowitz that currently holds $300 million to its name. Katie Haun, a General Partner and co-founder at a16z crypto, explained this most recent investment, stating:

As a first mover and innovator in stablecoins, MakerDAO represents a very compelling opportunity in the crypto space. MakerDAO’s technology, ecosystem and talent have put theory into action to deliver a decentralized stablecoin that we believe will help drive the future of the crypto economy.

Along with this token purchase, MakerDAO will reportedly receive operating capital for the startup’s next growth stage, three years of financial support for the MakerDAO community, “and most importantly, full operational support from the 80+ person Andreessen Andreessen Horowitz a16z team.” As with any investment, it seems that a16z crypto intends to build a symbiotic relationship with Maker, as the firm is reportedly seeking to drive DAI adoption and regulatory support with the aforementioned contributions.

And MakerDAO has acknowledged this plan, with Rune Christensen, the CEO and co-founder of MakerDAO, noting:

a16z crypto shares our vision for a world where the blockchain has leveled the economic playing field for everybody. With investment and operational support from a16z crypto, MakerDAO will be able to accelerate evolution, innovation, and adoption of the Dai Credit System.

Moving forward, MakerDAO intends to utilize the vast resources and knowledge of the aforementioned VC firm “to help guide and build Maker for years to come.”

As reported by Ethereum World News, this isn’t a16z’s first investment in crypto-related products, solutions, or services, as the prominent VC fund recently led Difinity’s $102 million funding round. As per a Fortune report on the matter, Dfinity intends to reinvent cloud computing and overthrow services like Amazon Web Services and Microsoft Azure via a decentralized alternative that utilizes blockchain technologies.

While news on that front has been slow as of late, it is clear that a16z and the top brass at Andreessen Horowitz are dead set on continuing to back the cryptocurrency industry in the form of substantial investments.

Photo by Sharon McCutcheon on Unsplash

The post Andreessen Horowitz Backs Maker (MKR) With $15M Investment appeared first on Ethereum World News.