Industry Recovery Fund Initiative: Binance Commits $2 Billion in BUSD

in LeoFinance2 months ago (edited)

Industry Recovery Fund (IRI), is a novel scheme in the crypto industry, aimed at breathing life into troubled projects in the web3 space that has long-term value creation. The initiative which was brought forward by Changpeng Zhao (CZ), the founder of the leading blockchain ecosystem and the largest digital assets exchange, Binance, has gained support from several top players in the digital finance sector.

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Over the years of cryptocurrency existence, several related companies/ projects, due to various reasons, including management errors or liquidity crunches have had to fold up. While these incidents have left associated customers in huge and/or unrecoverable losses, the image of the crypto industry has also been dented. As a remedial agenda, the Industry Recovery Fund came into existence.

It bears mentioning that 2022 has been the year with the highest count of project meltdowns in the crypto space. In May, the Terra ecosystem founded by Do Kwon and the TerraForm Labs crumbled, following the de-pegging of the algorithmic stablecoin USTC.

Consequently, many other projects including crypto hedge fund Three Arrows Capital (3AC), Voyager, and Celsius Network among others all went out of business due to the liquidity crisis. However, the most recent episode is the implosion of FTX caused by poor management from Sam Bankman Fried, which in turn fueled the current crypto winter.

To bring this category of crypto projects into full functionality again, CZ proposed the recovery fund which was later launched on Thursday, November 24. So far, Binance has contributed 2 billion dollars in BUSD to the fund pool. Also, the co-investors in the project including Jump Crypto, Polygon Ventures, Aptos Labs, Animoca Brands, GSR, Kronos, and Brooker Group have committed to participating with an initial aggregate commitment of around $50 million, per the announcement.

In its first donation, Binance committed $1 billion BUSD, and subsequently, CZ announced the second commitment of another $1 billion in BUSD.

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More About the Industry Recovery Fund Initiative

It should be noted that the IRI will span for about six (6) months only. During this period, crypto projects that experienced downtime due to certain external factors are asked to apply for funding. So far, more than 150 projects have applied for funding support.

However, a rigorous and unbiased application review will be carried out by Binance other contributors to the fund pool. For projects to be found worthy of funding, they must be innovative and have long-term value creation. Secondly, such projects must have a clear and viable business model, while prioritizing risk management.

In the end, eligible projects would be issued a percentage of the funds to help them rebuild and get back into the business. It is said that the Industry Recovery Fund initiative is not an investment fund.

Hence, each donor to the fund pool can withdraw any remaining unused funds from public addresses at the end of the initiative. Beyond the provision of financial aid to these qualified embattled projects, through the IRI, founders, and projects would also receive support in many other ways including formation, technical execution, fundraising, and more to help them come back stronger.

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