July 4, 2022

Crypto exchange Huobi Global launched a new venture capital arm aimed at investing in upcoming blockchain, web3 and DeFi projects.

The spinoff is called Ivy Blocks, and has over $1 billion in assets under management as part of its “war chest,” the exchange said in a statement.

The first project to be supported by Ivy Blocks is Capricorn Finance, which a decentralized exchange built on the Cube chain. Capricorn also offers automated money market features to other DeFi protocols.

Despite a 80% crash in Defi value this year, Huobi sees the space as one of the most “promising applications” of the decentralized internet.

Huobi’s Ivy Blocks to have three main sectors

Ivy Blocks will provide support to DeFi platforms on three main fronts. The project will consist of an asset management platform, an early-stage blockchain incubator, and a crypto and web3 research hub.

Beyond just funding, the project will also offer technical guidance, mentorship programs and assist upcoming blockchains with token listings.

Many promising projects tend to encounter liquidity constraints and a lack of go-to-market support, which present significant barriers to growth

Huobi CFO Lily Zhang

Huobi believes that a bulk of upcoming DeFi projects fail due to a lack of support- something it aims to provide.

Investment comes even as DeFi value plummets this year

Huobi’s push into DeFi comes after the space lost over half of its value this year, amid a broader crypto meltdown. Data from DeFi Llama shows that total value locked into DeFi has slumped nearly 80% to $90.4 billion, from $210 billion at the beginning of the year.

A bulk of these losses also stem from those in Terra, whose implosion wiped out about $40 billion in a month. 

A broader crypto meltdown has also dented DeFi valuations, as most major tokens used to transact in the space saw a large drop in prices.

Ethereum- the largest DeFi blockchain by value, saw the ETH token’s price plummet 56% in 2022.

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