Crypto Quill

Andreessen Horowitz (a16z), a prominent venture capital firm, has been involved in several crypto projects that sold tokens or non-fungible tokens (NFTs) to the public. This contradicts the claim made by Chris Dixon, a general partner at a16z, who said that none of the companies they invested in would do such a thing.

Dixon’s Statement on Hard Fork Podcast

Dixon appeared on the New York Times podcast Hard Fork, where he defended his firm’s investment thesis and the projects they support. He said that a16z was focused on building the infrastructure and applications of the decentralized web, or Web3, which he described as a more open, fair, and user-centric version of the internet.

He also said that a16z did not invest in projects that sold tokens to the public, implying that they were only interested in the technology and not the speculation. “No company we’re involved with — nor would we allow them to do this — sells tokens to the public,” he said.

However, a review of a16z’s investments reveals that this claim does not hold up to scrutiny. Several companies and projects backed by a16z have sold crypto tokens or digital assets to the public, either directly or indirectly.

A16z-Backed Projects That Sold Tokens

One such project is DFINITY, the company behind internet computer tokens (ICP). The project distributed tokens to individuals who made “donations” to the DFINITY foundation, a non-profit organization that supports the development of the internet computer network. The tokens were then listed on major exchanges, where they could be traded by anyone.

Another project is Fei, an algorithmic stablecoin protocol that aims to create a decentralized and scalable alternative to fiat currencies. Fei sold both the FEI token and the TRIBE governance token in its Genesis Event, which raised over $1 billion from investors. However, the launch was marred by technical issues and market manipulation, resulting in a loss of value for many participants. A court settlement later found that the sale was a violation of securities laws, and ordered Fei to refund the investors.

A third project is Sky Mavis, the developer behind the popular game Axie Infinity, which combines blockchain technology, NFTs, and gaming. The project sold the AXS token, which is used for governance and rewards in the game, on Binance Launchpad, a platform that helps crypto projects raise funds from the public. The AXS token has since become one of the most valuable tokens in the crypto space, with a market capitalization of over $6 billion.

A16z-Backed Firms That Sold NFTs

It is worth noting that several firms in which a16z has invested have publicly sold NFTs, which are unique digital assets that represent ownership of various forms of content, such as art, music, or collectibles. NFTs are also considered tokens, as they are issued and traded on blockchain networks.

Some notable examples of a16z-backed firms that sold NFTs are:

• VeeFriends, a platform used by entrepreneur Gary Vee to sell his NFTs, which are based on his drawings and characters. The NFTs also grant access to various events and experiences hosted by Gary Vee.
• PROOF, the company behind the PROOF Collective, which is a curated collection of NFTs created by artists, musicians, and celebrities. The NFTs were auctioned to the public, with some of them fetching high prices.
• Yuga Labs, the firm behind Bored Apes, which is one of the most popular NFT projects in the market. The project consists of 10,000 unique NFTs that depict different apes with various traits and accessories. The NFTs also grant access to a community and exclusive benefits for the owners.

A16z’s Crypto Funds and Strategy

Founded in 2009 by Marc Andreessen and Ben Horowitz, a16z is a private venture capital firm based in Menlo Park, California. The firm has been an early and influential player in the crypto space, backing a wide array of projects and companies that seek to leverage blockchain technology.

One of their earliest and most notable investments was in Coinbase, a leading cryptocurrency exchange, which they funded in 2013. Coinbase went public in 2021, making a16z one of the biggest beneficiaries of its success.

Recognizing the unique nature and potential of blockchain technology, a16z launched dedicated crypto funds, which are separate from its main funds. The first such fund was announced in 2018, with a substantial commitment of $300 million, followed by subsequent funds, attracting even larger investments.

a16z’s crypto investments have been diverse, covering various segments of the blockchain ecosystem. These investments include infrastructure projects like Ethereum, financial services platforms like Compound and Maker, NFT marketplaces like OpenSea and Rarible, and decentralized finance (DeFi) protocols like Uniswap and Aave.

a16z’s crypto strategy has been to support the most innovative and promising projects in the space, regardless of their stage or sector. The firm provides not only capital, but also guidance, expertise, and connections to its portfolio companies, helping them grow and succeed.

However, a16z’s crypto strategy also involves taking risks and facing challenges, as the crypto space is still nascent, volatile, and uncertain. Some of the projects that a16z has invested in may face regulatory hurdles, technical difficulties, or market fluctuations, which could affect their performance and reputation.

Moreover, a16z’s crypto strategy may also raise questions about its consistency and credibility, especially when it comes to its stance on token sales and NFTs. As Dixon’s statement on the Hard Fork podcast shows, a16z may not be fully transparent or accurate about its involvement in these activities, which could undermine its trustworthiness and integrity.