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 Stakingrewards.com.
- 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.