On the 7th of February, DFINITY raised $61 million US (approximately $76 million CAD) from US Venture Capital firm Andreessen Horowitz and hedge fund PolyChain Capital.
According to DFINITY’s website, the company represents the “Internet 3.0 paradigm…a blockchain computer with unlimited capacity, incredible performance, and algorithmic governance.” The DFINITY internet hopes to have a significant impact on large businesses and enterprises.
“We’ve got the demand in the hundred of millions wanting to participate in the project,” said Dominic Williams, president and chief scientist of DFINITY, to Reuters. “Though the DFINITY Foundation is well capitalized, our focus with this financing was to bring in key partners who can provide real strategic value and help distinguish us from the noise in the market.”
The new investment brings the project’s total funds to over $100 million USD (approximately $125.9 million CAD). According to Reuters, DFINITY will use $21 million USD (approximately $26 million CAD) to build the DFINITY blockchain and support developers who work on the protocol. The fund will be a capital pool that is co-managed by the DFINITY founders and Polychain Capital.
How DFINITY decentralizes the internet
DFINITY’s decentralized internet operates differently to the first and second generation blockchain networks. According to DFINITY’s blog post, the company believes that Bitcoin and Ethereum’s limitations stem from its lack of governance. Due to the lack of governance, their blockchain networks are highly unsuitable for business applications and operations.
Although integrating governance intermediaries to existing blockchain networks are possible, it reduces system security and can tie in the existing regulations from local jurisdictions. Integrating local laws, though, makes the decentralized nature of the blockchain redundant.
DFINITY wants to shift from Bitcoin, and Ethereum’s “The Code is Law,” a paradigm where there is no governance that regulates the platform and underlying network, to “The AI is Law”. Instead of a completely decentralized structure, AI technology analyzes the crowds’ knowledge and information to form rules and structures. With governance in place, DFINITY can create a new blockchain network that is highly appealing and applicable to businesses.
The AI will provide a solid framework to freeze any smart contracts that harm the interests of those using the platform. Eventually, it will also mitigate the effects of hacks on the systems, continuously optimize the network’s security, and perform consistent upgrades on its underlying protocol and software without causing disruption to users on the network.
Williams sees DFINITY as a third generation network, an intelligent, decentralized cloud. By replacing “The Code is Law” with “The AI is Law,” everything in the system is free from a centralized control or intermediate but has the structures, systems, and governance required for businesses to thrive.
DFINITY’s vision has two primary goals. The first is to re-engineer the way large monopolistic technology intermediaries like Uber, eBay, Facebook, and even web search engines like Google, structure their IT systems. By adopting new autonomous software, their decentralized systems can continually update themselves, reducing costs concerning IT maintenance and human resources.
The second goal is to see significant large-scale re-engineering of enterprise IT systems; enterprises can take advantage of the benefits of blockchain technology. While the upfront cost is more expensive for blockchain networks than traditional cloud services, the majority of costs involved in enterprise IT systems come from human capital. DFINITY believes that it’s possible to create systems that require fewer people while leveraging blockchain technology.
While these goals focus on improving business and enterprise IT structures, Williams believes that DFINITY’s overarching vision is to prove that blockchain technology has broader and more profound implications for society.