It seems that Ethereum Co-Founder’s Polkadot project might not be able to raise $60 million as previously expected. There are some investors that have already placed some funds in the company but then the company would be valuated at under $1 billion.
Blockchain project Polkadot’s bid for a $1.2 billion valuation is finally happening, although, maybe not how the company has planned it at the first place.
Since the beginning of this year, the Switzerland-based nonprofit organization behind the project, the Web3 Foundation, has been trying to raise up to $60 million through a private token sale. It seems that finally, three Chinese funds have agreed to invest $15 million in the project’s DOT tokens.
However, it seems that in the short term, the investors who are interested in the project are willing to pay prices that would value the project under $1 billion.
Polkadot Selling Only 70 Percent
While it’s unclear how many tokens were offered, one source said Polkadot has been able to sell only 70 percent of the intended 500,000 DOT.
However, if we look the beginning of the story, it has all started when Gavin Wood, who was the first programmer to code Ethereum creator Vitalik Buterin’s white paper, set out a vision for the decentralized Web3. Wood is also a co-founder of the Parity technologies, a company that had pioneered in on-chain governance protocol upgrades, Proof-of-Authority consensus, private Ethereum transactions, Warp sync and pruning and also “Rust and Wasm” in blockchain.
Polkadot goal is, as Wood explained, solving several current problems in crypto, beginning with scalability. This blockchain based company is trying to enable cross-blockchain transfers of any type of data or asset, not just tokens.
In the beginning, each so-called “para-chain” may be domain-specific, such that there could be on para-chain devoted to assets and one devoted to smart contracts. However, over time, if certain decentralized apps become large enough, they could become their own para-chain, and the structure of para-chains could become more hierarchical. That is also one of the reasons this “failure” in raising funds could change for better.
Polkadot will however probably have to increase the allocations of tokens to reach the value of $60 million.
Still Optimistic and Excited
Parity CEO Jutta Steiner said the firm is excited about the new possibilities Polkadot can bring to the table. She added:
“True interoperability delivered in a scalable, governable protocol has real potential to push the dream of an open internet forward. We’ve been hard at work over the past year building [custom-blockchain platform] Substrate and development on Polkadot has progressed as hoped.”
Bare in mind that in the in October 2017, the Web3 Foundation managed to raise $145 million through a public sale of half the total 10 million supply of DOT, valuing the tokens around $30 per piece. (The tokens currently run on top of Ethereum but would be swapped for ones on the new blockchain once it launches.)
According to Polkadot’s white paper, 30 percent of the total token supply was reserved for Web3 Foundation, and the remaining 20 percent should be distributed prior to the mainnet launch. Web3 has spent half of its allocation, leaving it with 15 percent of the total supply, said a source familiar with the situation.