Chinese venture capital firm Qiming Venture Partners led a Series A in Hashquark, a Hong Kong-based staking service startup.

Why it matters: The investment signals that cryptocurrencies are increasingly becoming a viable sector for Chinese investors after years of mistrust.

  • The investment comes at the right time, as staking services are expected to boom with the launch of Ethereum 2.0 later this summer.
  • The world’s second most-popular blockchain network will be switching to a Proof-of-stake (POS) model. This will substitute mining for staking, expanding the market for staking providers.

Details: Hashquark is one of a few staking startups to receive funding from a traditional tech fund, Qiming said in a statement sent to TechNode on Wednesday.

  • Fenbushi Capital, Hashkey Capital, Hash Global, Imtokenventures, and SNZ also participated in the round. The total funding amount was not disclosed.
  • Hashquark is one of the top four staking providers in the world, offering services for 30 of the most popular Proof-of-stake tokens, including Cosmos, Tezos, Dash, and IRIS.
  • “The proceeds of the round will be used to strengthen our team and expand globally. This year is a critical time for the large-scale application of blockchain and digital finance,” said Leo Li, Hashquark’s founder and CEO.

Context: Qiming is an early-stage investor in Chinese tech companies. Some of its notable initial public offering (IPO) exits include Meituan Dianping, Xiaomi, and Bilibili.

  • As a staking-as-a-service infrastructure startup, Hashquark takes care of the technical aspect of staking for a fee. It collects POS tokens from its clients and stake them to become a validator on the corresponding POS chain. With every successful validation, Hashquark earns a reward from the chain, most of which it passes on to its clients.
  • Hashquark’s commission, at 10% to 30%, is far higher many of its competitors, according to staking data provider
  • Hashquark is a subsidiary of Hashkey Digital Asset Group, one of Asia’s top blockchain and fintech investors.
  • It is one of the earliest partners of Polkadot, an inter-chain communication protocol that raised $43.3 million in a token sale on Tuesday and is a competitor to the Blockchain Services Network, an “internet of blockchains” project backed by the Chinese government.

Correction: An earlier version of this article incorrectly stated that Hashquark is a subsidiary of Hashkey Capital rather than a subsidiary of Hashkey Digital Asset Group. 

Eliza was TechNode's blockchain and fintech reporter until July 2021, when she moved to CoinDesk to cover crypto in Asia. Get in touch with her via email or Twitter.