Web3 Fund ABCDE Halts New Investments to Focus on Existing Portfolio

ABCDE, a major Web3 and blockchain-focused investment fund, announced it will stop making new investments and halt fundraising for its second phase. The $400 million fund will instead concentrate on supporting its current portfolio of projects while its co-founder shifts attention to a new crypto incubator called Vernal.

Du Jun, ABCDE co-founder and Huobi exchange founder, made the announcement on April 19 via X. He confirmed the fund will continue providing "post-investment support and exit arrangements" for existing projects to maintain commitments to entrepreneurs and liquidity providers.

The fund's investment history includes backing Soon (Solana Optimistic Network), an Ethereum layer-2 solution that raised $22 million through an NFT sale in January 2022. Soon claims faster performance than Solana with average block times of 50 milliseconds compared to Solana's 400 milliseconds.

According to Cryptorank data, ABCDE allocated 28% of its investments to Bitcoin scaling technology, 16% to Ethereum liquid staking derivatives finance infrastructure, and 12% to layer-2 solutions, restaking, and smart contract platforms. Over the past three years, the fund invested more than $40 million across 30+ projects.

This news comes during a volatile period for the broader crypto staking landscape. On April 17, Bitcoin staking protocol Babylon saw $1.26 billion worth of Bitcoin (14,929 BTC) unstaked by four addresses, causing its total value locked to drop 32% from $3.97 billion to $2.68 billion.

Jun's decision coincides with his launch of Vernal, a new crypto incubator set to announce its shareholders, incubation rules, and first investments in May. He stated the move away from fundraising wasn't due to financial issues but rather concerns about the crypto industry's development trajectory.

In his X post, Jun criticized the current market environment: "Many projects are extremely short-sighted and only think about how to get listed on the exchange as soon as possible, and what is left behind is often a mess." He expressed worry about primary funds that promote "listed projects" without focusing on actual value creation.

This strategic shift aligns with recent industry discussions, including Cardano founder Charles Hoskinson's call at Paris Blockchain Week for fourth-generation cryptocurrency projects to develop more collaborative tokenomics to compete effectively with major centralized tech companies entering the space.