Arch Labs has secured a venture partner, DPI Capital, to fund early-stage DeFi projects on its Bitcoin protocol, betting on its potential to rival Ethereum’s ecosystem.
Bitcoin DeFi Network Arch Finds VC Backer for Early-Stage Projects
Arch Labs has found a quasi-official venture partner to fund early-stage projects on the Bitcoin DeFi protocol. DPI Capital is concentrating its efforts exclusively on Arch, betting on its potential to rival Ethereum‘s DeFi ecosystem.
DPI Capital is a leading investment bank and advisory firm specializing in emerging markets.
Founded in 2005, the company has grown to become one of the largest and most respected players in the industry.
With offices across Asia, Africa, and Latin America, DPI Capital provides a range of services including mergers and acquisitions, debt financing, and equity capital markets.
The company's expertise spans various sectors, including energy, natural resources, and infrastructure.
Bootstrapping decentralized finance (DeFi) on any blockchain requires a mix of builders with big ideas and funders to back them. That much is as true for baselayers as it is for the financial protocols launching atop them. Arch Labs’ eponymous network is one of many projects trying to bring DeFi to Bitcoin, having raised $7 million in launch capital from big-name venture firms last year.
Now, it’s shifting focus to help fund those smaller protocols that could make the whole network boom. In this goal, it has found a willing partner. An entire venture company, DPI Capital, is dedicating millions of dollars in resources toward backing early-stage DeFi projects that enter Arch’s first accelerator program, called Keystone.
The Focus on Pillar Protocols
‘We’re really focused on the pillars right now, the things that are most important for growth,’ said Brent Fisher, a general partner at DPI Capital. That means finding and funding compelling projects building borrow-and-lend protocols, decentralized exchanges, stablecoin platforms, and real-world asset (RWA) plays.
DPI used to have a more diversified risk appetite as it chased deals across the Ethereum ecosystem. But not anymore. ‘I’m going all in on Arch,’ Fisher said. This myopic focus carries a lot of risk, but Fisher believes that Arch is the winning bet, and no strategy’s better than betting on all its horses.
The Potential of Bitcoin
Fisher’s Arch bull case stems from Bitcoin’s enduring status as the world’s most valuable crypto asset. The crypto is nearly one trillion dollars more valuable than Ethereum despite lacking a strong internal DeFi ecosystem, which has long been the runner-up’s claim to fame.
Plenty of family offices, investment companies, and increasingly exchange-traded funds hold BTC and do so without much concern for their inability to deploy those coins into low-risk yield plays on the Bitcoin Network. This is because Arch’s Bitcoin-powered programmability layer allows for such activity, Fisher said.
‘I think that play is huge, because, as you see these ETFs with Black Rock and ARK and so forth, for them to even get a Delta neutral strategy of 10% is a game changer,’ Fisher said. Keeping bitcoin on the network eliminates a level of risk, he said.
Launched in 2009 by an individual or group using the pseudonym Satoshi Nakamoto, Bitcoin is a decentralized digital currency that allows for peer-to-peer transactions without the need for intermediaries.
It uses cryptography to secure and verify transactions, making it a secure and transparent alternative to traditional fiat currencies.
As of 2022, Bitcoin has a market capitalization of over $1 trillion, with millions of users worldwide.
The Keystone Accelerator
Arch’s Keystone accelerator is thus a natural pipeline for DPI to get a right-of-first refusal look at many of the teams angling to launch their BitcoinFi tech on the platform. DPI will write checks of up to $250,000 for the teams it likes and then help them find other investors and scale.
The partnership between Arch Labs and DPI Capital marks an exciting development in the world of DeFi and Bitcoin. As the landscape continues to evolve, it will be interesting to see how these two entities work together to bring innovative projects to life on the Arch Network.
