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Odaily Translator | Nian Yin Si Tang

Summary:

Summary:

- DeFi startup Arch completed an oversubscribed seed round co-led by DCG and SoftBank’s Upload Ventures.

- The company will use $5 million in funding to try to become the "BlackRock of Web3."

Decentralized finance (DeFi) startup Arch has completed $5 million in financing, trying to achieve its goal of becoming the "BlackRock of Web3."

The oversubscribed seed round was co-led by Digital Currency Group (DCG) and SoftBank’s Upload Ventures. Other investors include the venture capital arm of Latin American blockchain firm Ripio, TechStars and GBV, Arch said in a company press release.

The startup’s goal is to make investing in DeFi accessible to ordinary investors.

Diversity is the only free lunch in finance, Storaker said, and he hopes to make the Web3 ecosystem simpler. His decentralized asset management protocol creates diverse tokenized portfolios that individuals will be able to purchase through smart contracts and then self-custody.

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Aiming to be the BlackRock of Web3

But why should investors use Arch instead of buying cryptocurrency exchange-traded products from big players like BlackRock or 21Shares? BlackRock, in particular, is getting deeper into the cryptocurrency space.

Archer will take a different approach — not just through Bitcoin and Ethereum — to provide investors with cutting-edge Web3 investment exposure, Storaker said.

"When we say 'the BlackRock of Web3,' we really want to be on par with their approach and what people expect from passive products in terms of approach," Storaker said.

"It's not something you're born with," he added, "but I think people are willing to try."

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For ordinary investors

That’s why Ripio Ventures, the venture capital arm of Latin America-based blockchain company Ripio, decided to back the team. Arch has the potential to reach millions of users in Latin America and presents a potential partnership for Ripio, they said.

Ripio currently has about 3.5 million users, mainly in Argentina and Brazil, a Ripio spokesman said.

Arch is currently built on top of Ethereum. Mainly, Storaker said, because ethereum is an order of magnitude larger than any other ecosystem.

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Are tokens securities?

However, offering tokenized products to ordinary investors does present challenges.

US Securities and Exchange Commission (SEC) Chairman Gary Gensler has repeatedly reiterated that he believes that "most cryptographic tokens are securities" and that many intermediaries need to register with the SEC, "whether they call themselves centralized or decentralized."

"We've worked with legal counsel almost from day one to make sure we don't run afoul of regulations in the U.S. and elsewhere," Storaker said. Slow, but that way you don't screw up."

The platform will offer two index tokens: the Arch Blockchain Token, which will track the world's largest blockchain; and the Arch Ethereum Web3 Token, which will track the native tokens of major protocols like Chainlink and Uniswap.

Arch previously raised a Pre-Seed round of financing and passed the TechStars accelerator program.