- Venture capitalists face criticism in Web3.
- Ctrl Wallet investors make a long-term commitment.
- Withdrawals will be based on milestones.
Venture capitalists often face criticism over their involvement in the crypto space. Critics point out that venture firms prioritize making money quickly over the project’s long-term success. Still, this is not always the case.
Investors in the self-custody Crtl Wallet decided to prove their commitment to the project. Their latest liquidity initiative aims to prove they are in the project for the long run.
Ctrl Wallet Investors Make Major Commitment
Investors in the Ctrl Wallet, a self-custody wallet supporting over 2,100 blockchains, decided to prove their commitment to the project. On Wednesday, September 11, the wallet’s largest investors announced they would lock 32% of the total XDEFI tokens for 12 months.
Sponsored
The investors participating include Delphi Digital, Mechanism Capital, Morningstar Ventures, and the company’s co-founders. Together, they control over 50% of the token’s circulating supply. The lockup of that amount of tokens will substantially impact XDEFI’s liquidity and price stability.
“This initiative demonstrates the unwavering belief we have in Ctrl’s potential,” said Emile Dubié, CEO of Ctrl Wallet. “By committing such a significant portion of tokens to liquidity provision, we are not only supporting the token’s stability but also laying the groundwork for future growth.”
How the XDEFI Lock-up Will Work
To ensure that investors align their interests with the project, withdrawals will follow several milestones. After six months, investors can withdraw a quarter of the tokens, but only if XDEFI reaches a fully diluted valuation (FDV) of US$100 million.
Further withdrawals will trigger when the token hits US$200 million, US$300 million, and US$500 million FDV. Still, the founders and venture capitalists will benefit from this move. Notably, their deposited token will receive a 10% annual percentage yield (APY).
In any case, a milestone-based withdrawal plan reduces the risk of sudden sell-offs. This allows the XDEFI token to grow and mature without facing sudden supply shocks. This is crucial when Crtl Wallet sees an influx of new users and prepares for a rebrand from XDEFI to CTRL. Notably, according to the team, the weekly active user count reached 400,000 in the last quarter.
On the Flipside
- Token lock-ups are not uncommon in crypto. For instance, investors who bought discounted Solana tokens from the FTX bankruptcy estate agreed to a long lock-up period.
- In August, Hamster Combat attacked venture capital’s role in Web3. Its team raised concern over their misaligned incentives with users and the long-term growth of the project.
Why This Matters
The long-term liquidity commitment by Ctrl Wallet’s major investors protects smaller investors during the lockup period. It also gives the project critical time to grow and attract new users and investors.
Read more about the Ctrl Wallet and its features:
Ctrl, New User-Friendly Crypto Wallet, to Offer Zero Gas Fees on Almost Any Chain
Read more about criticism of venture capital to
What’s Behind Hamster Kombat Bashing Venture Capitalists
