Praxis receives $525m funding to build ‘first Network State’ with crypto-native economy

Praxis, a self-described “internet-native alliance”, has received a $525 million funding pledge to build a new city which promises a crypto-centered economy and fewer regulations for tech leaders.

In an Oct. 16 blog post, Praxis announced it has received $525 million to build the “first Network State” from a number of tech companies and angel investors, including crypto lending platform Arch Lending, Manifold Trading, and investment firm Global Emerging Markets Digital.

According to a Wall Street Journal report, GEM Digital provided the largest chunk of the funding. The firm pledged $500 million to Praxis’ city building project.

To access GEM Digital’s funding, Praxis has to provide GEM with crypto tokens representing future real-estate ownership. Praxis would need to list the crypto tokens on a public crypto exchange.

CEO and co-founder of Praxis, Dryden Brown, shared news of the funding on X. He stated that Praxis and its business partners have designed a “novel drawdown mechanism” for the development of new cities. The $525 million funding would be used for its first deployment.

“Seeing institutions like BlackRock commit to crypto, we designed a crypto mechanism for financing large scale projects using RWAs, in partnership with the largest new city development project in the Middle East, Global Emerging Markets & Arch Lending,” said Dryden.

Although the location of the new city has not been shared, Brown told the Journal he has been considering locations in Latin America and the Mediterranean regions for the city.

According to Praxis’ blog post, the Network State aims to reduce regulatory barriers to encourage “rapid breakthroughs in AI, crypto, biotech, energy, and advanced manufacturing.”

The Praxis team wants to place the new city within what is called the Acceleration Zone2, a special economic zone that is equipped with fewer restricting regulations that would enable tech companies to operate with more freedom. Meanwhile, the city will adhere to “traditional values of Western Civilization.”

In a separate blog post, Praxis explained that Network States would become the next step for wider crypto adoption, as the city integrates on-chain infrastructure into core institutions. This serves as a parallel to the traditional finance bodies that are found in nation states.

Founded in 2019, Praxis has received capital from several venture firms, including Paradigm, Bedrock, Apollo Projects, Winklevoss Capital and Day One Ventures.