- Seven major crypto firms have pledged an initial capital of $50 million for Binance’s Industry Recovery Initiative (IRI).
- Binance has already pledged $1 billion to the fund and is willing to add another billion if the need arises.
On Thursday, November 24, crypto exchange Binance officially announced the launch of its Industry Recovery Initiative (IRI). Amid the current turn of events and collapse of the crypto exchange FTX, Binance chief Changpeng Zhao was the first to propose this idea.
Introducing the Web3 Industry Recovery Initiative! #Binance and a number of key industry partners have joined together to commit $1B+ to provide financial support to the most promising and highest-quality companies that need it most.
Let's support industry growth together.
— Binance (@binance) November 24, 2022
The recovery fund basically seeks to help cash-strapped startups which are fundamentally sound but facing liquidity crises due to the industry-wide contagion. In its press release, Binance said that it has committed $1 billion in funds to a public address. Binance said that they are willing to contribute another $1 billion in the future if the need arises.
Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, and Brooker Group are some of the early contributors. Together, they have pledged an early capital of $50 million for participating in the fund.
Binance said that they have already received 150 applications from companies seeking support under the IRI. Each of the participating co-investors will get an opportunity to review the deals and can make decisions independently of each other. In its press release, Binance said:
As a leading player in crypto, we understand that we have a responsibility to lead the charge when it comes to protecting consumers and rebuilding the industry. The mandate of this new effort is to support the most promising and highest quality companies and projects built by the best technologists and entrepreneurs that, through no fault of their own, are facing significant, short term, financial difficulties. What makes this initiative unique is the collaborative approach to restoring confidence in Web3.
Some facts about the Industry Recovery Initiative
Binance explains that the IRI is not an investment fund but a “co-investment opportunity for organizations eager to support the future of Web3″. Each participant will have to set aside a committed capital, either in stablecoins or other tokens, and put the funds in public addresses to ensure transparency.
Binance said that its also working with other deal structures for traditional institutions that are looking to work under the broader theme of the IRI. Binance also said that it will characterize project applications based on three keys factors of
- Innovation and long-term value creation.
- A clearly delineated and viable business model.
- A laser focus on risk management.
Furthermore, Binance chief Changpeng Zhao has been stressing having an industry recovery fund for the crypto sector after the collapse of the crypto exchange FTX. However, it will be too early to comment on how this pans out. Speaking to Bloomberg, David Adams, portfolio manager of the King River Digital Assets Fund said:
The market will be watching the fund’s public wallet address closely to see whether it attracts a material amount of non-Binance capital, as this will indicate how broad-based the industry support is for stabilization.