The startup formerly known as Nebulous has raised a $3 million funding round led by Paradigm with participation from Bain Capital Ventures, Bessemer Venture Partners, A.Capital, Collaborative Fund, Dragonfly Capital Partners, Hack VC, INBlockchain, First Star Ventures and others. 

The startup also rebranded, as Skynet Labs, to focus on promoting the namesake application hosting platform, which uses the token-fueled Sia network.

• Launched in 2014, the Boston-based firm has a staff of 11 and has raised over $9 million to date.
• CEO David Vorick said there are more than 100 applications and 10 web portals already using Skynet as a decentralized storage alternative, including the popular exchange Uniswap. Skynet launched in February 2020.
• “It’s just another means of accessing Uniswap, if Infura goes down people can still access the interface,” Vorick said, referencing Ethereum-friendly infrastructure options. “This offers the ability for anyone to run their own portal and get full trustless access to the network. If we turn off all our infrastructure tomorrow, Skynet still exists.”
• Paradigm partner Dan Robinson said in a press statement he’s keen to see decentralized storage lead to social networking without distinct silos, like YouTube and Twitter, adding, “The project has enabled a growing ecosystem of builders to quickly prototype censorship-resistant applications and interactive websites.”
• In reference to the Skynet app store that popped up following rumors that TikTok might get delisted from popular app stores, Vorick said, “This is a third-party app that comes from the community. … Quick responses to things like TikTok being banned don’t need to ask us for permission.”
• This rebrand comes nearly one year after the startup reached a $225,000 settlement with the U.S. Securities and Exchange Commission for an unregistered token sale in 2014. Skynet users now rely on Siacoin tokens if they run a full Sia node.

Read more: Sia Network Raises $3.5 Million From Bain Capital to Become Crypto Hulu

IBM, known for pitching banks and blue-chip firms on private blockchain technology (the sector’s equivalent of alcohol-free beer) is taking decisive steps toward working with the hard stuff.

The 110-year-old computing giant is licensing its software to METACO, a Switzerland-based firm that specializes in custodying digital assets for financial institutions, the companies said Thursday. This is the business of safeguarding the cryptographic private keys that control a cryptocurrency wallet, the 21st-century version of protecting a vault full of gold bars.

Separately, Deutsche Bank, Europe’s eighth-largest bank, is enlisting IBM’s help to build its planned crypto custody and trading services offering, two people familiar with the arrangement told CoinDesk. The parties are close but no deal is signed yet.

These are not IBM’s first steps into crypto custody; Big Blue has been quietly making moves into digital asset safekeeping since at least early 2019. Most recently, IBM’s Cloud Hyper Protect was teaming up with Zug, Switzerland-based decentralized finance (DeFi) data oracle, DIA (Decentralised Information Asset). 

IBM’s further wading into these waters speaks to a broader change in the posture of corporates toward crypto. In the late 2010s, the preferred approach for banks and other large companies was to try to shoehorn blockchain, the decentralized recordkeeping method pioneered by Bitcoin creator Satoshi Nakamoto, into their processes to create more efficient databases. Like many big companies, IBM enthusiastically backed the enterprise blockchain trend, which has turned out to be a slow and relatively fruitless grind. 

Read more: NY Gov. Cuomo Announces Pilot Project Using IBM’s Blockchain-Based COVID-19 App

Meanwhile, financial institutions have woken up to public blockchains and crypto assets, and that’s where the action is, the sector’s well-known volatility and manifold operational and regulatory risks notwithstanding. Banking being the biggest client industry sector at IBM, it’s the natural infrastructure choice for most banks and large financials looking for a toehold in the growing crypto asset space. 

“Large enterprises are going to focus on where the rapid growth of demand is, and right now that is on decentralized finance services on public blockchains,” said Paul Brody, blockchain lead at consulting giant EY. “Firstly, transaction-centric banks want to offer crypto assets to their customers, and secondly, firms want to tokenize traditional assets, and plug them into the DeFi.” 

Here come the suits

The bitcoin price rally this year has caught many market participants by surprise, leaving some native crypto firms looking to improve their infrastructure, and banks scrambling to build out digital asset strategies, according to Adrian Patten, co-founder of Cobalt, a firm that’s trying to rewire crypto to work as smoothly as institutional foreign exchange trading. 

“IBM naturally sells to banks and is very well positioned,” said Patten, whose firm has also partnered with METACO around crypto custody. “A core part of providing custody is the secure management of keys. Many firms use IBM hardware for that and it’s going to be interesting to see what they do next to enhance the functionality of what’s being offered.”

Under the deal announced Thursday, METACO will protect against data breaches and cyber threats using IBM’s Cloud Hyper Protect Services and “Keep Your Own Key” (KYOK) encryption software. The solution can be offered wholly in the cloud (i.e., in IBM’s data centers), on premises (METACO clients’ servers), or in a hybrid environment, the companies said.

METACO has emerged as a go-to digital asset custody provider for banks and financial institutions, particularly in crypto-friendly Switzerland and across Europe, having provided tech to allow safekeeping of bitcoin and other virtual assets for megabanks Standard Chartered, BBVA and the Swiss-based division of Russia’s GazpromBank. 

Read more: IBM, Top Australian Banks Execute Country’s First Blockchain Bank Guarantee

Neither IBM nor METACO would make executives available for interviews. Deutsche Bank did not return requests for comment.

Hillery Hunter, an IBM fellow, vice president and the chief technology officer of IBM Cloud, said in a statement:

“As companies such as METACO continue to help the world’s top banks and exchanges manage their digital assets, IBM’s confidential computing capabilities help its clients ensure their data and processes are managed securely, bringing trust into the ecosystem and providing privacy assurance.” 

“This integration will allow us to deliver greater levels of security and trust to our clients as they innovate in the digital asset space,” said Adrien Treccani, the CEO and founder of METACO.

Sovryn, a project that aims to bring decentralized finance (DeFi) to Bitcoin, is in the final stages of approving a 180 BTC (-9.35%) investment from “Pomp” but only under certain circumstances.

Under the terms of the proposal, cryptocurrency evangelist Anthony “Pomp” Pompliano would invest 180 bitcoin, worth around $10 million at today’s prices. While this might seem like yet another crypto investment story, this one is notable for the efforts Sovryn is taking to ensure that its existing token holders aren’t marginalized simply because it’s getting a big investment.

While in most cases decentralized governance goes out the window when well-heeled investors come knocking, Sovyn’s decentralized governance community is taking things slow to make sure all members will continue to have a say in the project’s governance.

As of this writing, a deal had still not been finalized. Jascha Samadi, co-founder and partner at Berlin-based early-stage venture fund Greenfield One, which led a seed round in Sovryn in 2020, said this marks the shape of things to come when it comes to decentralized projects and investing.

“The standard way fundraising decisions happen is the team’s treasury or the foundation’s treasury simply raise money by selling tokens to private investors, and it happens in a very closed circle,” said Samadi. “This is the first time that we actually see a team bringing a proposal like this to their community at such an early stage into their journey.”

Community-based governance and decentralized autonomous organizations (DAOs) have evolved like everything else in the crypto space. As well as day-to-day decision making and software updates, decentralized governance structures vote on big choices relating to fundraising and stakeholders being added to the community.

The proposed $10 million investment would be made by Pompliano’s new asset management firm, Pomp Investments. Until last September, Pompliano was in charge of investments into crypto at Morgan Creek Digital Assets. 

It’s worth noting that Sovryn is a buzzy project and earlier this month the community chose to sell $10 million worth of its SOV tokens. There are also conditions such as an extended lock-in period of 16 months for tokens.

While the investment itself is about bringing DeFi to Bitcoin, Pompliano agreed this marks a new chapter in decentralized investing.  

“You will see more proposal-based investment as the crypto industry deepens, with decentralized communities deciding on investments rather than traditional, centralized and founder-based decision-making,” Pompliano said in an interview. 

“DeFi” is the umbrella term for the exchange of cryptocurrencies or the lending and borrowing of them, carried out using business rules set out in computer code, which have typically flourished on the Ethereum public blockchain.

The Bitcoin blockchain, a straight up peer-to-peer payment network, is not the natural home for transactions that lock up funds, include outside data feeds and pay yields on assets. This requires some extra bells and whistles, which Sovryn adds in the form of parallel and uncluttered channels and enjoy the same unbreakable security as Bitcoin.

Sovryn project creator Edan Yago echoed Pompliano’s view of this as a new approach to investing.

“Many projects that are waving the flag of decentralization, but most of them ultimately have some kind of prime mover behind it,” Yago said in an interview. “I think one of the really interesting things with Sovryn is how radically and seriously the community takes this idea that there is no central authority behind the project.

Bitcoin rewards company Lolli has raised $5 million from a cast of notable investors.

Announced Wednesday, Lolli’s pre-Series A round features Serena Williams’ Serena Ventures, her husband Alexis Ohanian’s Seven Seven Six and Night Media, the management company that represents YouTuber MrBeast.

Other investors from the influencer ranks include Casey Neistat, Phil DeFranco, Cody Ko, Noel Miller, Ian Borthwick and Gabriel Leydon.

Last year Lolli raised a $3 million seed round led by PathFinder, with participation from Digital Currency Group (CoinDesk’s owner), Michelle Phan and Ashton Kutcher.

Bitcoin is on a bull run and crypto is booming, so firms with a sturdy enough use case to have toughed it through the bear winter are making hay while the sun shines. Lolli, which incentivizes shoppers to go to its partner stores with bitcoin rewards sent to a wallet, now boasts over 1,000 merchants and 250,000 users. 

Lolli co-founder Alex Adelman says the company currently offers an average of 7% bitcoin-back rewards at retailers such as Kroger, Microsoft, Booking.com and Ulta. Lolli users have earned more than $3 million in bitcoin rewards to date, Adelman said.

“We started out with the idea of educating people about bitcoin,” Adelman said in an interview. “So we just attached it to something that everybody does: shop. People think about investing when they think about bitcoin, but there’s probably less than 1% of the world that would consider themselves investors. Everybody would consider themselves a shopper.”

The ultimate goal is financial empowerment and financial inclusion, said Adelman, which are also key reasons Serena Williams and her team support Lolli.

“I’m excited to announce my investment in Lolli, a company on a mission to make bitcoin more accessible,” Williams said in a statement. “Earning and owning bitcoin is a step towards financial inclusivity for all people.”

Bitcoin reaching all-time highs recently close to $60,000 is also great news for an app built upon stacking sats.

“They say for a technology to be transformative, you need to be 10 times better than the predecessor,” said Adelman. “Since we launched, bitcoin has gone up by 11 or 12 times, so 10 times better than any cashback program out there.”