Crypto bridge Wormhole seeks $2.5 billion price tag in private token sale

Recently compromised crypto bridge project Wormhole is planning a private token sale in a bid to raise close to $200 million.

Documents obtained by The Block lay out details of the proposed sale of 750 million HOLE tokens — 7.5% of the total supply — to institutional investors at a price of $0.25 per token. If successful, the sale would generate proceeds of $187.5 million, valuing the project at $2.5 billion.

Two people familiar with the matter confirmed that Wormhole is attempting a token sale at that valuation, and that the raise is yet to close. A spokesperson for Wormhole declined to comment.

The documents obtained by The Block, dated February 18, appear to have begun circulating among potential investors just weeks after a $325 million exploit — ranking among the largest crypto heists ever — that saw 120,000 ether drained from the Wormhole protocol. Within hours of the exploit, trading firm Jump Crypto stepped in to replenish the lost ether.

Wormhole’s technology provides a pathway for digital assets to flow between different blockchains. There is currently $3.7 billion in Total Valued Locked (TVL) in the protocol, according to its website.

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Unveiled by blockchain infrastructure firm Certus One in October 2020, Wormhole initially took the form of a direct token bridge between the Ethereum and Solana ecosystems. Developers rolled out a second version of the protocol in August 2021 that supported seven different blockchains — including Solana, Terra, Avalanche, Ethereum, Oasis, Binance and Polygon. At roughly the same time, Certus One was acquired by Jump Crypto.

Crypto bridges have drawn significant attention from venture capitalist investors in recent months. In the last few days alone, Wormhole rival LayerZero raised $135 million in a round led by Sequoia Capital, Andreessen Horowitz and FTX Ventures. Qredo, a crypto infrastructure player with one eye on cross-chain swaps, secured $80 million in February, in a round led by Dan Tapiero’s 10T Holdings.

Lock ups

The documents obtained by The Block suggest that buyers of the 750 million HOLE tokens will have their holdings locked for one year until a “network launch,” after which they will unlock annually – meaning they can be sold — over the course of three additional years.

They also state that the price of the HOLE tokens is subject to demand, suggesting there is a possibility that pricing could have changed in the weeks since the document was distributed. The Block has not been able to ascertain which investors, if any, have committed to buying HOLE tokens. 

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© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.