Solana Ventures raises US$ 100M fund to support crypto projects in South Korea

Solana would provide US$ 100 million to aid the development of NFTs, GameFi and decentralised finance (DeFi) projects in South Korea. The fund would also aid Terra-based developers and companies who were impacted by the collapse of that ecosystem last month. 

This fund  is backed by capital from the Solana community treasury and the venture arm’s pool of capital.  According to a press release, the fund is aimed at funding investments and grants ‘across all Web3 verticals,’ with a current focus on the South Korean market.

In an interview with TechCrunch, head of communications at Solana Labs Austin Federa commented on the fund, stating ‘A big portion of Korea’s gaming industry is moving into web3. We want to be flexible; there’s a wide range of project sizes, team sizes, so some of [our investments] will be venture-sized checks.’

General manager of games at the Solana Foundation, Johnny B. Lee believes the Terra developers should not be held responsible for what happened to Terra and need to receive help. In a recent interview with Bloomberg, he said, ‘The developers did nothing really wrong, but they're left in the lurch.’

In addition, Solana-based projects also need support. Earlier this month, the network experienced an outage that left it out of order for over six hours. The team explained the problem, ‘“Earlier today, a bug in the durable nonce transactions feature led to nondeterminism when nodes generated different results for the same block, which prevented the network from advancing.’

South Korea as a crypto hub

South Korea currently appears to be a nurturing environment for crypto projects, thanks to the government’s recent announcement to pledge US$ 187 million to build its Metaverse ecosystem. This Metaverse would focus on the growth of digital content and corporations within the country.

The newly-elected President Yoon Suk-yeol also echoed the government’s intentions to expand the crypto industry by vowing to allow initial coin offerings (ICOs). He also promised to raise the minimum threshold for paying capital gains on crypto investment earnings. This would relieve the onus on current investors by requiring them to pay taxes only if their crypto earnings exceed $40,000 annually instead of the current threshold of US$ 2,000. 

Last month, the South Korean National Assembly Research Service also announced it will finalize its crypto-friendly regulation framework by 2023 and implement it in 2024. The legislators also confirmed their decision to roll out a central bank digital currency (CBDC) next year. 

Solana's entry into the South Korean market indicates it is banking on the country’s growing interest in GameFi and DeFi as rivals Polygon, Avalanche and other smart contract platforms court the stranded Terra developers and hone in on the country’s potential opportunities. 

Already, South Korean projects are buzzing with activities trying to benefit from the grant fund. Few such projects are Klaytn layer-1 blockchain and Upbit, the country's largest crypto exchange.

Competition in the country is quickly emerging, including KlaySwap, Klaytn's biggest DeFi platform, which has a US$274 million total value locked (TVL) based on the reports from DeFi ecosystem tracker DeFi Llama, while Upbit has created its own NFT marketplace.

However, even with external interest in South Korean Blockchain-based games, domestic companies would still find it challenging to launch their Blockchain games in the country.

The South Korean government passed a law restricting play-to-earn games from offering monetary and cryptocurrency rewards to players. To comply with the law, Apple and Google had to remove play-to-earn games from their Korean stores last December. 

Photo: Getty