VCs Enter Cross-Chain and Layer-2: Exploring Institutional Tools

Venture capital firms are aggressively pursuing market share in the current bull market. Borderless Capital, a Web3-native investment company, has acquired quantitative trading firm CFT Capital. This acquisition will allow Borderless to add artificial intelligence and proprietary trading products to its portfolio, with a focus on increasing efficiency in capital deployment across Web3 verticals. The company currently has $600 million in assets under management and is actively seeking opportunities in Latin America. Borderless is also an early investor in companies such as Algorand, Blockchdaemon, and Securitize.

Borderless Capital’s co-founder and managing partner, David Garcia, believes that cross-chain standardization will be the next chapter in the evolution of the crypto space by 2024. He stated that the blockchain industry will see new L1s, L2s, and even L3s emerge, and that Web3 will require an aggregation layer to enable interoperability across different chains. Another key focus for Borderless is decentralized physical infrastructure (DePIN), which the company believes will revolutionize industries such as communication, distributed computation, mapping, and transportation.

In other news, several startups have secured significant funding recently. Morph, a layer-2 platform for Ethereum Virtual Machine (EVM), raised $20 million in a seed round led by DragonFly Capital. The company plans to use the funds for talent acquisition, developer incentives, and marketing efforts. FLock.io, a London-based Web3 decentralized AI startup, announced a $6 million seed fundraising round. The company aims to decentralize AI agent training and end user data collection with its Federated Learning-powered Training Platform. Keyring Network, a platform that leverages zero-knowledge technology to address regulatory compliance and market liquidity, raised $6 million in seed funding. Rails, a self-custodial perpetuals exchange, secured $6.2 million in a seed round. The exchange offers self-custody trading of perpetual contracts and plans to use the funds to further develop its platform. Build on Bitcoin (BOB), a hybrid layer-2 solution, raised $10 million in a seed funding round. The funds will be used to launch the first Bitcoin layer-2 with Ethereum Virtual Machine (EVM) compatibility. Tokenization platform RACE raised $5 million to support its recently released testnet. RACE offers tokenization of various assets and plans to establish Decentralized Investment Committees to conduct due diligence on potential opportunities.

Venture capital firms are actively investing in the blockchain and cryptocurrency space, seeking opportunities for growth and innovation. These recent funding rounds highlight the diverse range of startups and projects attracting significant investment in the current market.