News
25 June 2020

AVA Labs raises another $12 million to fund its Ethereum competitor

AVA Labs, the development team behind the Avalanche blockchain, has raised $12 million in a private sale of its AVAX token. Participating VC firms included Galaxy Digital, Bitmain, NGC Ventures, and Dragonfly Capital, among other undisclosed investors. Initialized Capital also joined the round, adding to the AVAX investment it secured last year in AVA Lab’s $6 million Seed sale.

As an encore, Avalanche plans to host a public sale starting on Jul. 8 with the intent of distributing up to seven million tokens. This total could rise to twelve million depending on the round’s success early on.

Why it matters: - Avalanche is one of many green smart contract platforms vying to knock Ethereum off of its pedestal. The project has plans to launch on mainnet at some point this year, which would place amongst to Solana, NEAR Protocol, Celo, Polkadot, and Oasis Protocol as the latest base layer networks to hit the market. While a multi-chain future seems likely, not all networks will find product-market fit. In a sea of relatively undifferentiated systems, developer advocacy and VC-supplied onboarding incentives could determine which chains gain a following versus those that end up becoming immaculately constructed wastelands. - When talking about Ethereum's current market dominance, AVA Labs co-founder and COO Kevin Sekniqi compared "Avalanche and Ethereum to Zoom and Skype." Long story short, Zoom won out despite Skype having a "15-year technical lead." His reasoning is that network effects "are easily broken" by superior technology. While not always the case (insert obligatory VHS vs. Betamax reference), Kevin's sentiment echoes that of Charles Hoskinson. In last week's Unqualified Opinions podcast, the Cardano founder emphatically said the "great lie" in crypto is that Ethereum has achieved an insurmountable network effect. We'll see, but it's clear the smart contract wars are heating up and worth keeping an eye on.

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