Layer 1 blockchain network aelf recently announced the launch of a $50-million ecosystem fund that targets to invest in blockchain projects within its own and other multichain ecosystems. 

The ecosystem fund offers both strategic and financial investments in blockchain startups and projects, with a ticket size of $100,000 to $2 million, Hazel Zhang, Head of Investments at aelf, told DealStreetAsia.

The company eyes Web3 startups that are addressing substantial market needs spanning gaming, DeFi, NFTs, and public goods, per the company release.

So far, it counts decentralised Web3 game ecosystem Crystal Fun; and Mythic Protocol, an entertainment company developing games, media, and platforms that enable users to contribute and develop a collaborative virtual universe, among its investees.  

The Singapore-headquartered firm currently invests from its own money but is open to fundraising from external investors in the future, Zhang said. “The focus now is on finding the good projects to invest in first,” she added. 

The ecosystem fund comes after the industry recorded the chillest fundraising quarter for crypto venture capitalists in April-June 2023, recording the fewest crypto-focused global fund launches since Q3 2020, according to a report published by the research arm of crypto investment firm Galaxy Digital.

Meanwhile, crypto and blockchain firms worldwide completed 456 deals worth $2.3 billion in Q2 this year. The financing proceeds were the lowest since Q4 2020, while the deal count was a tad above Q1’s 439 deals, per the same report.

Despite the bleak fundraising scene, Zhang believes that the valuation has cooled down after a rollercoaster in 2022. “Compared to early last year, valuation has done a very wide adjustment downwards. Right now, we are quite comfortable with the valuation range that we are seeing,” she added. 

Founded in 2017, aelf is a layer one blockchain network running on the C-sharp programming language, one of the most popular programming languages. This contrasts with other blockchain networks; for example, Solidity is the programming language used to develop smart contracts run on Ethereum. 

“C-sharp is a relatively popular, conventional programming language that is very commonly used by a lot of Web2 companies. That is one of the key points that we want to leverage in terms of encouraging adoption and to help Web2 companies and projects move to Web3,” Zhang explained.  

Although the market has seen a number of blockchain networks, including Immutable, Polygon, and Binance, that target gaming, the firm has found that many gaming studios, especially those based in Southeast Asia, often lack the support they need from those firms when building their games. This is a gap that aelf wants to fill in.

“Right now, our core focus market is Southeast Asia, or Asia Pacific in general. So we’re having a lot of initiatives in places like Vietnam, Hong Kong, and Singapore, and we’re also actively exploring Japan and Korea,” Zhang said.