According to sources briefed on the plans, ConsenSys, a cryptocurrency start-up that has benefited from the rise in decentralised finance, is raising $3 billion in fundraising.
based in New York ConsenSys creates and invests in initiatives based on the ethereum distributed ledger, a bitcoin competitor that may be used to build financial services apps and other automated software programmes.
ConsenSys stated in April that it had raised $65 million in a “formation round” from JPMorgan, Mastercard, UBS, and other investors. It did not respond to a request for comment on the fundraiser.
The funding would be a significant step forward for the seven-year-old company, which is managed by ethereum co-founder Joseph Lubin, who has made a number of public gaffes in his attempts to capitalise on blockchain technology. Lubin has undertaken at least two personnel reductions of more than 10%, and ConsenSys restructured last year to separate its investment arm into a distinct organisation.
The surging price of bitcoin and other cryptocurrencies has attracted developers and new users to the fast-growing but dangerous sector, prompting investors to pour money into digital assets this year.
According to PitchBook data, venture capitalists have invested $20.7 billion in bitcoin start-ups so far this year, up more than 160 percent from the previous high in 2018.
Lubin has primarily self-funded ConsenSys with ether, the digital asset linked with ethereum, which he owns.
As more people explore with cryptocurrencies, MetaMask, a popular doorway to decentralised finance programmes developed by ConsenSys, has risen significantly..
Since October 2020, MetaMask has facilitated more than $8.9bn of trading through a feature that allows users to swap pairs of digital tokens, according to data on the cryptocurrency analysis site Dune Analytics.
MetaMask charges a fee of 0.875 percent on each deal, totaling almost $78 million in revenue over the same time period.
According to one person familiar with the figures, ConsenSys has predicted that annualised MetaMask revenues might reach $1 billion in the following year. According to the firm, MetaMask has over 10 million monthly users.
Several more ethereum-based start-ups have recently received high venture capital values.
On Tuesday, the creators of the famous cryptocurrency-based video game Axie Infinity announced that the firm had raised $152 million in funding led by Andreessen Horowitz, valuing it at $3 billion.
In the last year, the price of Ether has increased by more than 920 percent, while the price of bitcoin has increased by more than 400 percent.