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FTX-Backed Crypto Unicorn LayerZero Bought Out Stake
The interoperability protocol sent a memo to investors outlining its buyout strategy.
By Brandy Betz
Updated May 9, 2023, 4:02 a.m. Published Nov 10, 2022, 7:12 p.m.
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In May, blockchain interoperability protocol LayerZero raised $135 million at a $1 billion valuation in a funding round that was co-led by FTX Ventures. The implosion of crypto exchange FTX – and the empire of its CEO, Sam Bankman-Fried – raised questions about its venture capital arm and the fate of its portfolio companies.
LayerZero CEO Bryan Pellegrino answered the question on Thursday, tweeting out a memo that was sent out to the startup’s investors. LayerZero structured an agreement and bought out FTX, FTX Ventures and sister firm Alameda Research from all equity positions, token warrants and all other agreements between the parties.
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LayerZero currently has about $107 million in direct cash balance and $27 million in on-chain funds primarily in stablecoins for a total of $134 million. An additional $11.5 million was on FTX and used operationally, but LayerZero said it is treating this as $0 for “the sake of sanity” and expects that some of that money will be recoverable.
Pellegrino wrote that the startup has “at least [seven] years of runway even in our aggressive projections.”
Read more: The Collapse of the FTX Empire
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