Chia Network Raises $5M to Rival New Crop of DeFi-Friendly Base Layers

Chia Network, led by BitTorrent creator Bram Cohen with the aim of creating a programmable money platform, just raised another $5 million in an equity round led by Slow Ventures.

Despite the resurgence of token sales this summer, Cohen said the plan since 2018 has been to go the IPO route and rely on venture capital until the token launch.

"We've now finished that format so if you generate plots today and put the resources into building those they will still work the day mainnet goes live," Cohen said, describing how the Chia Network uses "Plots" of empty computer space instead of proof-of-work mining like bitcoin.

The startup has now garnered roughly $16 million in total venture capital since it launched in 2017, according to Cohen, who added the startup will use the funds to grow the team.

Layer 1.Gavin McDermott of IDEO said his firm has confidence in this yet-to-be launched blockchain because Chia creators are "Early internet pioneers" who already "Achieved significant milestones in terms of public node participation," currently estimated at over 1,430.Jill Carlson of Slow Ventures said she is looking forward to the mainnet launch, scheduled for later this year, even though Layer 1 blockchain projects have "Largely fallen out of favor within the venture capital community," which are now generally focused on decentralized finance and decentralized applications.

Like many crypto startups in 2020, the Chia team is focused on DeFi applications.

Cohen said Chia is poised to capture Ethereum's market share by offering comparable DeFi functionality in 2021, while Ethereum may still struggle to scale.

Chia President Gene Hoffman added, "It's as functional as Ethereum. It might force you to do a different way than Ethereum, but there are reasons why."

The Chia team aims to make money using traditional business-to-business offerings, even though the technology is being built through a hybrid open source model.

Hoffman also said he is already exploring opportunities with several prospective clients, including government agencies, for live pilots when the network launches in several months.