Sequoia Capital announced that the fund, Sequoia Crypto Fund, would be used on liquid tokens and digital assets. The firm has set aside between USD 500-600 million, according to a statement on its website. Sequoia Capital, a 50-year-old firm, has already made significant investments in the cryptocurrency space.
It added that it had been asked by its network in the crypto space to take a ‘more active role in managing’ its tokens—including staking them. Staking refers to the process of users locking-up their cryptocurrency, often to provide liquidity to a protocol or network, in exchange for rewards in tokens.
It can also refer to the process by which the operators of proof-of-stake networks lock up their tokens to help the blockchain validate transactions.
A number of cryptocurrencies like Solana and Tezos already use this consensus mechanism, and the second-largest by market cap, Ethereum, is in the process of making the transition. Proof of stake is different to Bitcoin’s proof-of-work process, which is much more energy intensive.
Sequoia Capital has already partnered with some of the biggest names in the crypto world, including the CEO of the FTX exchange, Sam Bankman-Fried, and Jack Dorsey, the co-founder of Twitter and Bitcoin enthusiast.
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