DEXON Foundation, a startup developing a high-speed blockchain protocol, announces it has closed a $20M private funding round led by IDG Capital
Kyt Dotson / SiliconANGLE :
Context & Ripple Effects
DEXON Foundation's $20M private round lands mid-2018, when blockchain startups were splitting between two funding paths: public token sales like DataWallet's $40M sellout earlier that year, and conventional venture rounds. Choosing an IDG Capital-led private raise puts DEXON in the latter camp, trading token-sale liquidity for institutional backing.
The same quarter, Ethereum-based derivatives startup dYdX closed its own $10M Series A — evidence that specialized protocol teams, not just exchanges, were attracting top-tier crypto funds. By 2021 that pipeline had matured into larger checks from mainstream institutions, with Goldman Sachs joining Blockdaemon's $28M enterprise infrastructure round.
First-order effects
- DEXON gains $20M and IDG Capital as lead backer, giving its high-speed protocol team runway without a public token sale.
- IDG Capital adds a 2018-vintage blockchain protocol position to a portfolio that later stretches to leading Moonshot AI's $500M Series C at a $4.3B valuation.
Second-order effects
- Rival high-throughput protocol teams now compete against a better-capitalized DEXON for the same developer and validator ecosystems, pushing differentiation toward performance claims and ecosystem incentives.
- Institutional leads like IDG Capital normalize private rounds over token sales, pressuring other protocol founders to offer equity-style deals to attract comparable backers.
Third-order effects
- If the pattern holds, blockchain infrastructure consolidates around privately funded protocol companies with institutional cap tables — the path dYdX followed from Series A to a $65M Series C — while open token sales become the exception rather than the default.
- Mainstream financial institutions moving in at the infrastructure layer, as with Blockdaemon, points toward blockchain protocols being absorbed into ordinary venture and banking portfolios rather than remaining a retail-investor asset class.
The trend: Blockchain protocol funding shifted from 2018's token-sale-versus-venture split toward institutionally led private rounds, pulling mainstream investors like IDG Capital and eventually Goldman Sachs into the stack.