Michael Arrington’s crypto VC firm, Arrington Capital, is launching a $100 million venture fund for bets on projects building on Algorand.
Called the Arrington Algo Growth Fund (AAGF), the new fund will invest in tokens and equity, Arrington told CoinDesk in a call. It is Arrington Capital Management’s second crypto-focused fund after the flagship Arrington XRP Capital Fund, which in March reported $236.7 million in assets.
AAGF adds to a growing list of crypto funds now pumping over $500 million into cryptographer Slivio Micali’s proof-of-stake blockchain. Ranging from NFT bets to municipal buildouts with crypto-friendly Miami, the funds are all aiming to accelerate Algorand’s ecosystem development.
“Our LPs include several parties who align with the Algorand vision and want to support the expanding ecosystem with new offerings,” Arrington said. “We may also bring on additional investors. Additionally, I am personally investing in the fund.”
Algorand, like other protocols, is eager to gain an edge in the lucrative decentralized finance (DeFi) arms race. Its 11 million addresses pale in comparison to sector leader Ethereum’s 157 million, but the blockchain is far more nimble, both in terms of transaction processing power and speed. Even so, Algorand lacks an established DeFi ecosystem that other chains enjoy.
However, that may start to change. Yieldly, a “no-loss lottery” (akin to PoolTogether) and Algorand’s first native DeFi application, has amassed over $11 million in total value locked (TVL) following its June 5 debut. Algorand Head of Marketing Keli Callaghan said the app, which launched with backing from the Algorand community fund, is already becoming a hit.
But the network is also courting opportunities on the more centralized side, said Callaghan. That includes projects that will allow financial institutions to use DeFi infrastructure and provide central banks with digital currency rails.
“Our perspective is not that one is going to overtake the other, that one’s going to win or make the other irrelevant, but they sort of converge,” she said. “We see ourselves as sort of helping with this bridge” between banks, firms and DeFi.
Arrington Capital may be best known in the cryptosphere for its XRP fund, which launched in late 2017 also with $100 million in capital. The firm has remained true to Ripple Labs’ embattled token even as other companies in the space flee.
“We are extremely loyal to Ripple and to XRP and we believe in that ecosystem,” Arrington said, “but it’s a multichain world.”
As for how the XRP army will react: “I’m interested in the answer to that myself – we’ll see.”
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