Telos is hedging against a possible ‘prolonged bear market’ with fresh investment from its first-ever marquee investors
Telosblockchain just raised $8 million for its first ever set of marquee investors.
- The funding amount will be used to hedge against a possible ‘prolonged bear market’ next year.
- Douglas Horn, the chief architect of Telos, told Business Insider that they kept away from marquee investors because they didn’t want to create any big whales that could influence the price of the TLOS token.
And, the change in philosophy comes as the company gears up for a possible bear market next year. “I have no idea what will happen next year but all bull cycles end,”
Simply put, just in case a ‘crypto winter’ sets in next year, Telos will still have the liquidity it needs to keep growing without having to sell off any of its TLOS tokens.
No big ‘whales’ to mess with TLOS token prices
Until now, the Telos blockchain funded itself entirely from bootstrapping with no large investors. As a result it doesn’t have any big ‘whales’ which cause market movement with just one click of a button. This helps the tokenomics remain stable.
“In the early phases of the project, we did not want to lop off a big part of the token supply to give to any group of VCs or others. That is the kind of thing that unbalances the tokenomics forever.”
According to Horn, if Telos had brought in this kind of investment earlier, the project would have had to sell off 30% to 40% of its tokens to venture capitalists. By waiting it out, the blockchain was able to keep the overall sale to 2% to 3% of the chain.
What is Telos going to use the money for?
As with most funding, the fresh capital will be put to use towards three objectives — development, marketing and liquidity. And, a big part of meeting these objectives is having the right people to drive the change.
“We’ve expanded our development team by roughly 300%. Now we are looking to continue those expansions and bring in top level developers and marketers,” said Horn.
“We’ve had a very rapid scaling up lately from a $10 million project to a $100 million project and soon to a $1 billion project — perhaps by the end of the year. Next year is likely to see us grow to $10 billion and then $100 billion based on this pattern and the valuations of comparable chains like Solana and Cardano,” said Horn.
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