$400M Web3 Fund ABCDE Halts New Investments, Shifts Focus to Incubator Vernal

$400M Web3 Fund ABCDE Halts New Investments, Shifts Focus to Incubator Vernal

Web3 and blockchain-focused investment fund ABCDE has officially paused all new investments and fundraising activities, redirecting its efforts toward supporting existing portfolio projects and launching a new crypto incubator called Vernal.

In an April 19 post on X (formerly Twitter), Du Jun, co-founder of ABCDE and founder of Huobi Exchange, confirmed that the $400 million fund will not pursue additional fundraising for a second phase nor make new investments. Instead, the firm will continue providing post-investment support and exit strategies for its current projects to uphold its commitments to entrepreneurs and liquidity providers (LPs).

Source: Du Jun

“My personal work focus will also gradually shift from financial investment in the primary market to strategic investment-led and deep incubation-based, focusing more on industrial synergy and long-term value creation,” Jun wrote.

The announcement comes just three months after ABCDE’s last investment in Soon (Solana Optimistic Network), an Ethereum Layer-2 solution that raised $22 million via an NFT sale to mark the launch of its mainnet. Soon claims to surpass Solana’s performance with average block times of 50 milliseconds, compared to Solana’s 400 milliseconds.

SOON block times, compared to other blockchains. Source: SOON

According to data from Cryptorank, ABCDE has allocated:

28% of its investments in Bitcoin scaling technologies,

16% in Ethereum liquid staking derivatives finance (LSDFi) infrastructure, and

12% in L2s, restaking, and smart contract platforms.

Over the past three years, ABCDE has deployed more than $40 million across 30+ projects, maintaining an internal rate of return (IRR) that remains among the highest globally, even amid a volatile market.

ABCDE investments focus area, average round size. Source: Cryptorank

Vernal Incubator Launches

The decision to halt fundraising comes shortly after Du Jun announced Vernal, a new incubation brand aimed at fostering long-term, value-driven blockchain projects. Vernal is expected to reveal its first round of incubated projects, alongside shareholder details and incubation guidelines, in May 2025.

Jun emphasized that the decision to pause was not driven by financial issues but rather by concerns about the current state of the crypto startup ecosystem.

“Frankly speaking, I am increasingly unable to agree with the current ecological atmosphere of the primary market,” Jun said.

“Many projects are extremely short-sighted, only focused on getting listed quickly—what’s left behind is often a mess.”

He also criticized the behavior of some early-stage funds for prioritizing short-term exchange listings and market hype over long-term project value and sustainability.

Source: Du Jun

A Call for More Collaborative Ecosystems

This sentiment echoes similar concerns raised by Cardano founder Charles Hoskinson, who recently called for fourth-generation crypto projects to adopt more collaborative and sustainable tokenomics. Speaking at Paris Blockchain Week on April 9, Hoskinson said:

“The problem right now is that the tokenomics and the market structure are intrinsically adversarial. It’s sum zero.”

“You can’t build a global ecosystem this way. The incumbents are much larger, and you won’t win with short-term thinking.”

With the crypto investment landscape rapidly evolving, ABCDE's pivot may signal a broader shift from fast-paced speculation to incubation, strategy, and long-term innovation—setting a new tone for future Web3 development.