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Cryptocurrency Firms Invest Millions in ‘Professor’s Coins’ Despite Centralization Concerns
Cryptocurrency companies have increased investments in the market this year despite fundamental concerns about blockchain. A new report from Bloomberg shows an influx of funds”Professor Coins”, virtual asset projects started by university professors.
According to the report, companies started by academics have received millions from venture capital firms as the market recovers. The inflows come on the heels of renewed investment in the first quarter of 2024, after Bitcoin (BTC) rose to an all-time high above $72,000.
Companies like CheckSig, Sahara, etc. were founded by university academics and have seen inflows over the past couple of months.
Cryptocurrency firms support the remake
The move to professor coins has seen significant inflows to companies offering restaging services. Restaking allows validators to rely on assets already staked. This leaves room for new projects and the reason to get a head start by borrowing resources.
Crypto VC firms have gained interest Autostratus and Babylon which recently saw flows of $118 million for both projects. Founded by Sreeram Kannan, a professor at the University of Washington, the company secured $100 million in funding from Andreessen Horowitz while Babylon founded by Professor David Tse of Stanford University raised 18 million dollars.
Riad Wahby, an engineering professor at Carnegie Mellon University, highlighted the research and utility of both projects in the field. “They’ve put a lot of thought into these types of reformulation technologies. I mean, he’s kind of their baby, so it makes sense. And I think that more and more of this technology will come from research.”
Kate Lawrence, chief executive of venture capital firm Bloccelerate, said academic background could be a negative factor because professors tend to focus on theory rather than practice. However, the company invested in both projects based on the restaging model.
Centralization concerns
The move to professor coins by cryptocurrency companies is not without criticism from the industry, as many cite reduced decentralization. This comes after EigenLayer’s token launch plan which will distribute 1.67 billion tokens, of which over 50% will go to early participants and investors.
Additionally, the coins will not be transferable, causing minor concerns. The team explained that making it non-transferable provides time to improve decentralization.
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