Why in crypto risk capital money is necessary

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Today is the day!

Berachain’s Mainset finally starts.

Already in August we looked at how both Berachain and Monad were able to carve their own ways in a very crowded room, and David even described them as a potential Solana murderer recently.

So it is fair to say that the Hype train left the train station a long time ago.

“Simply put, in a landscape in which most blockchain apps and chains survive or thrive independently of one another, Berachain is a philosophical challenge for the current chain app model. We believe that the consensus mechanism of the network for liquidity evidence (POL), with the network validator on certain apps based on Berachain, can lead to block rewards, as the entire industry looks at the relationship between client and blockchains ”,”, explained Michael Anderson of Framework.

Before the start of Mainnet, Berachain increased an appropriate capital. In his series B alone, which was led by Framework, it collected $ 100 million, and that does not count the $ 42 million series A.

“The Berachain community is by far the most fanatic that we have seen since our commitment in the early days of the chain left, and we believe that the combination of this raw enthusiasm with a real means of influence the direction of the network will be powerful, ”continued Anderson.

Projects that increase as much capital as Berachain are only a few and far apart. But collecting more than 140 million US dollars before starting your main network is not a small sum. It is therefore understandable that some questions why crypto projects want to collect a lot of money. And why VCS are willing to support such a project.

Tom Dunleavy from MV Global does not believe that projects like Berachain should increase so much capital. He would prefer to see around $ 10 million, he wrote in a post on X.

“The ratings associated with large capital recordings have the bar so high that they are for perfection for future user and sales metrics that will be 10 years in the future,” he argued.

But laying an upper limit for the increased amount is not a solution. Mason Nystrom, Junior partner at Pantera, said that there are a large number of reasons for projects to receive funds over 10 million US dollars. This includes competition, talent, volatility and opportunities.

The talent is expensive, and Pantera’s own computer survey from last year has determined the average salary of $ 176,000 for US employees.

Competition and volatility go hand in hand. Obviously there is a lot of competition in the room, especially as L1. Then add the cyclical nature of crypto and the money adds up.

After all, everything revolves around the opportunity: “The nature of success is power. The successful blockchain networks will be hundredweight to billion dollars networks. The mere size of the opportunity to offer the Blockchain Networks (e.g. L1S) enables them to adopt more capital in order to advertise the winners of the power law, ”said Nystrom.

At this point, cryptofinancing is not out of control and large capital increases do not occur every day. If a project manages to close a multiple million dollar round, I say, let them cook.

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Why in crypto risk capital money is necessary

ByAmelia Journalton

By Amelia Journalton

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