What sets altcoins apart from Bitcoin<\/a>? A verified Twitter account, token distribution to insiders, or founders who reveal their identities? Might the whole host of altcoin \u2018Foundations\u2019 and \u2018Labs\u2019 be a factor too? How about the blessing of an angel investor? Or all of the above?<\/p>\n Crypto and DeFi projects rely heavily on venture capitalists and angels who provide not just money, but a support system that helps budding projects look more legitimate. Who\u2019s looking? The countless smaller investors searching for a sign from above.<\/p>\n Ranging from noteworthy players such as Solana<\/a> to niche experiments like Worldcoin<\/a>, powerful VCs hold and even sculpt different parts of the ecosystems that many enjoy calling \u2018decentralized.\u2019<\/p>\n Token distribution is critical in determining the distribution of power in blockchains.<\/p>\n Concentrated insider ownership may permanently impair projects\u2019 ability to become credibly neutral public infrastructure.<\/p>\n Oligarchy is the system we\u2019re suppose to be disrupting.<\/p>\n 1\/ pic.twitter.com\/140092y1mu<\/a><\/p>\n \u2014 Ryan Watkins (@RyanWatkins_) May 17, 2021<\/a><\/p>\n<\/blockquote>\n But the question stands \u2013 When does a crypto-investor know that things have gone too far?<\/p>\n When reporting on crypto-funding rounds and ICOs where powerful investors throw their weight behind nascent projects, journalists tend to focus on the numbers. In doing so, however, they miss out on other forms of currency \u2013 Namely press attention, legitimacy, and endorsement.<\/p>\n A case in point \u2013 Solana\u2019s Series A funding round raised $20 million<\/a>, with Multicoin Capital taking the lead, along with more than five other major participants. In a statement, Multicoin Capital Co-founder Kyle Samani said<\/a>,<\/p>\n \u201cWe\u2019re very proud to lead this round, and we encourage developers everywhere to take a serious look at Solana.\u201d<\/p>\n<\/blockquote>\n Less than three years later, Solana is the fifth-largest crypto by market cap<\/a>, beating out both XRP and Cardano\u2019s ADA. Still, Solana is controversial thanks to its token distribution, which saw a large majority of its initial coins allocated to insiders<\/a>, according to Messari Research.<\/p>\n So, what happens when the VC model is stretched to an extreme? One of the many answers to this question is Worldcoin. This crypto-project aspires to distribute crypto to everyone in the world \u2013 but only after scanning recipients\u2019 eyes<\/a>. As one might expect, the backlash was swift and the project was even accused of being a Ponzi scheme<\/a>, courtesy of its multi-level operating model.<\/p>\n But, one thing set Worldcoin apart from the thousands of crypto-experiments that briefly flicker before vanishing into the void.<\/p>\n Source: Worldcoin.org<\/a><\/p>\n<\/div>\n With backers like Coinbase, Three Arrows, and FTX\u2019s billionaire founder Sam Bankman-Fried, it is that much harder to dismiss a biometric-data harvesting project<\/a> with its very own orb-wielding agents.<\/p>\n One critic of spurious altcoin support models is none other than NSA whistleblower and privacy advocate Edward Snowden. He declared<\/a> that large VCs are enabling \u201ccentralized garbage-coins\u201d<\/a> in which they have invested.<\/p>\n There is a strain of wealthy VC-guy who pretends to do you a favor by “warning” against Bitcoin (or whatever) while hyping centralized garbage-coins that they coincidentally happen to own an enormous stake in.<\/p>\n If you ever make it, don’t be that guy. If you are that guy, change.<\/p>\n \u2014 Edward Snowden (@Snowden) November 21, 2021<\/a><\/p>\n<\/blockquote>\n \u00a0<\/p>\n During an episode<\/a> of the\u00a0Uncommon Core<\/em> podcast, Co-founder<\/a> of Three Arrows Capital Su Zhu\u00a0tackled both sides of the centralization debate. In favor of VCs, Zhu pointed<\/a> out that developers need to be paid and that smart contract audits usually come with high costs.<\/span><\/p>\n On the flip side, the exec acknowledged that venture capitalists don\u2019t always champion groundbreaking innovation. He explained<\/a>,<\/p>\n \u201c\u2026the problem in that VC space too, is that there\u2019s a lot of groupthink, right? Where, you know, if Andreessen [Horowitz] does one deal, then everyone wants to do the same deal and then they lead all the deals, but then it\u2019s all the same.\u201d<\/p>\n<\/blockquote>\n Zhu also claimed<\/a> that major VCs are co-invested in each other and Coinbase, before suggesting that Coinbase listed VCs\u2019 tokens for the same reason. Calling it \u201cdangerous for the space,\u201d<\/a> Zhu reflected<\/a>,<\/p>\n \u201cSo I think, has that held back DeFi? Yeah, it has held back DeFi a lot because they can\u2019t take risks. They can\u2019t put out projects that solve use cases. They have to think about \u2018how do we crystallize?\u2019 How do we market high? How do we use this to put it on a PowerPoint for our next fund?\u201d<\/p>\n<\/blockquote>\n It\u2019s worth noting that at press time, Three Arrows Capital had listed Multicoin Capital<\/a> as one of its investments. Three Arrows also reportedly<\/a> invested in Worldcoin.<\/p>\n Worldcoin has confirmed $25m private fundraising round at $1B valuation. @a16z<\/a>, @coinbase<\/a>, @coinfund_io<\/a>, @DCGco<\/a>, @hashed_official<\/a>, @multicoincap<\/a>, Three Arrows, @variantfund<\/a>, @1confirmation<\/a> are among investors.https:\/\/t.co\/EaBwHuJ3P7<\/a> pic.twitter.com\/jzn5KZeap4<\/a><\/p>\n \u2014 ICO Analytics (@ICO_Analytics) October 23, 2021<\/a><\/p>\n<\/blockquote>\n But, crypto-support models don\u2019t stop with angels and funding rounds \u2013 even honorary positions count. One example of this is the icy Musk v. Zhao Twitter spat. When Binance suspended DOGE network withdrawals for several days, \u2018Doge-father\u2019 Elon Musk questioned Binance CEO Changpeng Zhao and called<\/a> the situation \u201cshady.\u201d<\/a><\/p>\n In the following hours and days \u2013 Zhang replied<\/a>, Binance put out an update<\/a> for DOGE traders, and Zhao published an apology message<\/a>.<\/p>\n More importantly, the little drama showed the crypto sector \u2013 and the world at large \u2013 that even in the decentralized system, DOGE investors have a social media-savvy billionaire on their side.<\/p>\n it’s really nice to see @elonmusk<\/a> standing up for the little guy here \u2013 dogecoin holders with their funds stuck in an exchange due to the exchange making an error<\/p>\n also a lesson to all: keeping your crypto in an unregulated exchange is quite risky ~ https:\/\/t.co\/rF5Ejsqwfi<\/a><\/p>\n\n
Be my friend, Godfather<\/h4>\n
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An offer you can\u2019t refuse<\/h4>\n
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Take the gun, leave the capitalist<\/h4>\n
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