Telos raises $8M funding before EVM launch to avoid token sales

Blockchain platform Telos raised $8 million in funding led by ConsenSys and Polygon investor John Lilic. The funding was secured right before the launch of Telos’ Ethereum Virtual Machine (EVM) platform, ending the company’s ongoing streak of bootstrapped initiatives.

Telos aims to redirect the recently secured capital on the platform’s development and marketing in addition to improving the liquidity of the ecosystem “without needing to resort to TLOS token sales in the event of a prolonged bear market over the next year.” According to Telos chief architect Douglas Horn:

“While this [bootstrapping] preserved our identity as an egalitarian, self-governing community, it left us exposed to the risks of continuing to fund our explosive growth through extended bear markets.”

Speaking to Cointelegraph about moving away from token sales, Horn said that Telos aims to prevent centralized ownership, which eventually leads to whale trades as the network matures. “By having a fair community launch and a truly decentralized operation, Telos also avoids regulatory scrutiny at the highest level possible for any crypto,” he added.

The $8 million funding was supported by a group of five prominent crypto investors, who intend to help Telos with “deep industry connections and deal-making expertise” to help fast-track exchange listings and decentralized finance initiatives. 

As a part of the deal, the investors received 1.7% of the total TLOS token supply:

“The investors entered the agreement via a community liaison when $TLOS tokens were trading at $0.90 USD and agreed to pay a $0.10 USD premium on the market price.”

This deal resulted in the total sale of eight million TLOS tokens, with none of the investors exceeding two million tokens in holding. At the same time, Horn believes that external investments will help Telos grow without risking “sacrificing token support or community sustainability.”

According to the company, the fundings are hosted on the in-house network’s Ethereum Gnosis safe, which will be redirected to marketing via Telos Foundations, development via Telos Core Developers and the Telos liquidity fund.

Related: Ethereum competitor Near launches $800M developer fund as DeFi competition heats up

In a bid to overtake Ethereum in the DeFi market, smart contract ecosystem Near Protocol secured an $800 million funding in late October toward improving the ecosystem’s decentralized finance capabilities.

As Cointelegraph reported, Near’s funding included a $350 million grants program, which incentivizes developers to create applications on the blockchain. About $250 million has been allocated to existing ecosystem developers while $100 million has been set aside for startup grants. The remaining $100 million will be spent on regional initiatives across Asia, Europe and the United States.