Nym Technologies, a Swiss privacy startup that shields online activity from surveillance using a mixnet, today unveiled a new $300 million fund to entice developers to its ecosystem.
The Nym Innovation Fund has secured $300 million in commitments from a range of venture capital investors, according to an announcement shared exclusively with The Block. Those backers include Polychain, Greenfield One, Huobi Incubator, Tioga Capital, Eden Block, NGC Ventures, HashKey Capital, Figment, Fenbushi Capital, OKX Blockdream Ventures, Tayssir Capital, KR1, Lemniscap and Andreessen Horowitz (a16z).
Grants under the program will range from roughly $50,000 to several million dollars, according to Nym’s CEO, Harry Halpin. Nym has not taken in the full $300 million up front, but instead plans to draw on the commitments it has received when necessary.
“We want to incentivize open source and decentralized developers who we don’t know to start building on this network,” said Halpin in an interview with The Block.
Halpin described Nym as a “decentralized mixing network” which uses blockchain technology to mix the so-called packets — containing potentially sensitive metadata — generated by all internet transactions, including cryptocurrency trades. Haplin said Nym’s mixnet technology shuffles these packets like a deck of cards, preventing even an “NSA [National Security Agency] level adversary” from determining who might be behind them.
Nym’s platform has a potentially wide range of use cases — not all of them in crypto. It could, for example, be used by messaging app Signal to scramble packets connected to communication. The company raised $13 million in a round led by a16z in November last year, bringing its valuation to $270 million.
The launch of the Nym Innovation Fund comes just a few weeks after Nym launched its token across a number of exchanges including OKX and Huobi. Privacy advocate Edward Snowden spoke at the launch event.
Incentivized packet mixing
While similar in some ways to the mammoth incentive funds rolled out in recent months by Ethereum challengers like Avalanche and Algorand, the Nym Innovation Fund doesn’t offer "liquidity mining" rewards.
Halpin explained that the Nym mixnet is somewhat similar to Bitcoin in terms of its incentive structure, except that nodes mix packets in exchange for rewards in NYM, instead of solving puzzles in exchange for bitcoin.
The $300 million committed to the developer fund by venture capital firms will be boosted, over time, by allocations of NYM from the company’s treasury as those tokens begin to unlock, according to Halpin. Indeed, the first batch of grants made under the new development initiative — which began to be distributed a few weeks ago — were funded by Nym itself.
They went to Carmela Troncoso, co-inventor of a privacy-enhanced COVID-19 contact tracing framework; cryptography expert Daniel Bernstein, who will be working on speeding up Nym’s packet format; Tails, the software used by Edward Snowden to leak NSA secrets; and Nymbox, hardware designed by the community that plans to use Nym’s technology to keep computer traffic private.
A group of cryptography experts will preside over dishing out the grants. They are ex-Meta employee George Danezis; Aggelos Kiayias of IO Global and University of Edinburgh; Ben Laurie of Google; and KU Leuven’s Bart Preneel.
These four form the basis of a newly formed Nym Foundation, which will publish an open call for proposals in late May. To apply, developers simply pitch their ideas to the panel.
In a statement in Nym’s announcement, Halpin said that though the new fund seems large, “it’s a drop in the ocean compared to the endless amounts of cash possessed by vested interests at Silicon Valley companies and nation-states that benefit from mass surveillance.”
He added: “We have new partners that are waiting in the wings to join the fund that we can't even announce in this initial fund. I'm just thrilled that developers now can finally get paid for building privacy-enhancing technologies.”
© 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.