Binance’s Industry Recovery Initiative (IRI) now has a new member: DWF Labs. The global digital asset market creator and multi-stage Web3 investment company has pledged $15 million to the cause. Binance launched IRI to help the cryptocurrency sector in its recovery from the prolonged crypto winter and the exacerbation brought on by the fall of FTX. Projects and businesses with high market potential that have been hit hard by the market crisis may qualify for funding under the Binance-led $1 billion program.
Crypto market crisis and the case for Binance rescue efforts
DWF Labs says that it has no exposure to loans or other dangerous financing instruments. Therefore, as the fallout from the FTX crash continues to play out, the company says it can continue to minimize associated risks. The company has made investments in both early and late stages of the market (venture capital and secondary markets, respectively). Also, the firm claims it was able to continue trading during these tumultuous times in the market because it had established effective risk management processes.
Binance, as the largest cryptocurrency exchange in the world, has taken the initiative to rally other industry leaders and raise money to save the cryptocurrency sector from collapse. Aptos, Jump Crypto, Polygon, Kronos Research, and Animoca Brands are just some of the companies that have publicly stated their support for IRI.
Several major actors in the crypto business have voiced agreement that a concerted effort is essential to overcoming the current impasse. No one is safe now that industry titans like Terra, BlockFi, and FTX have fallen. In addition, once a crypto company fails, the resulting negative sentiment sends shockwaves throughout the market. For example, after FTX went bankrupt, Bitcoin has had difficulty recovering to the $20,000 levels it regularly achieved in October.
To make matters worse, as the market suffers from recent losses, VCs are likely to drastically cut their investments in the blockchain industry. In the absence of external assistance, the industry must lift itself up by its own bootstrap. There is also concern that many investors may exit centralized exchanges and choose cold storage or decentralized exchanges. That might potentially worsen industry conditions.