San Francisco-based blockchain startup The Graph has announced the closure of a $5 million funding round on Tuesday, June 30th. The new funds add to the already $2.5 million the company raised back in January 2019 in a seed funding round led by Multicoin Capital.
According to the startup, this latest funding round attracted investments from “Framework, ParaFi Capital, Coinbase Ventures, and Digital Currency Group, CoinIX, Tally Capital, with continued participation from Multicoin Capital and DTC Capital.”
“The additional funding will be used to build and launch The Graph’s decentralized network,” the company noted in its announcement.
The Graph conducted the latest funding round through a SAFT sale. A SAFT sale (short for Simple Agreement for Future Tokens) is a contract through which a company sells the rights to claim future tokens when they are available.
It will be remembered that popular privacy-focused messenger Telegram used the same SAFT token sale back in 2018 to raise as much as $1.7 billion for its now-defunct Telegram Open Network project. Telegram had initially promised to deliver the tokens on October 31st, 2019 only to run into legal trouble with the US SEC over the sale. The SEC claimed that Telegram had sold unregistered securities to US residents. Last week, Telegram was ordered to return $1.2 billion back to the investors.
A SAFT token sale agreement allows startups to circumvent SEC regulations as they develop their applications because they are not selling securities but rather the right to claim these securities as a later date. In the meantime, the company receives the funds essential to building out the project or network.
In The Graph’s case, it is building a decentralized blockchain data query protocol. In the announcement, this is scheduled to launch later this year, however, a specific date was not provided. The Graph’s Query protocol will allow developers to query blockchain data from various dApps across multiple blockchains, however, as of now, the protocol only supports leading smart contract platform Ethereum.
“The Graph is working to make decentralization a reality. Blockchain developers have had trouble bringing their ideas to life because the infrastructure for Web3 wasn’t ready,” Yaniv Tal, The Graph’s Co-Founder said in a statement. “Teams used to spend months building proprietary indexing servers and operating the servers themselves. The Graph built an indexing protocol that allows developers to build beautiful consumer-grade applications without running servers. It’s designed to link fragmented data and make it all accessible via a convenient GraphQL API.”