Shiba Inu raises $12 million in token round for its new blockchain

Shiba Inu SHIB +4.31% , the team behind the popular namesake memecoin, has raised $12 million by selling its unreleased token, TREAT, to non-U.S. venture capital investors. These investors include Polygon Ventures, Mechanism Capital, Big Brain Holdings, Shima Capital, Animoca Brands, Morningstar Ventures, Woodstock Fund, DWF Ventures, Stake Capital and Comma 3 Ventures, Shiba Inu said Monday.

However, some of these investors, such as Mechanism Capital and Shima Capital, appear to be headquartered in the U.S. When questioned, Shiba Inu's lead developer, known as Shytoshi Kusama, told The Block that none of the investors are based in the U.S., though full entity names may not be disclosed.

Shiba Inu began raising for the round a few months ago and concluded it earlier this month, Kusama said. He declined to comment on valuation, but a source with direct knowledge of the matter told The Block that it was a tranched round, with each tranche occurring at valuations of $75 million, $100 million and $200 million, respectively.

Kusama said that the token round comprises both pre-seed and seed rounds.

Shiba Inu's TREAT token

The TREAT token, according to Shiba Inu, serves as the "utility and governance token" of its new privacy-focused Layer 3 blockchain, which is being built on Shibarium, its Ethereum Layer 2 blockchain.

TREAT will be the final non-stable token from the Shiba Inu ecosystem, said Kusama, adding that the ecosystem will introduce a new token called Shi later this year. The ecosystem's existing tokens include the popular SHIB memecoin, BONE, Shibarium's governance token, and LEASH, a fixed-supply token held by Shiba Inu's loyal users that provides them with benefits and perks, such as BONE rewards.

Although the TREAT token has not yet been released, CoinGecko and CoinMarketCap already display some trading volume for certain TREAT tokens. Kusama called this a "scam." The authentic TREAT token will be minted by The Shiba Inu Mint S.A., a Panama corporation, Kusama said.

Shiba Inu's new blockchain

Shiba Inu is developing its new Layer 3 blockchain using fully homomorphic encryption technology from cryptography company Zama, which recently raised $73 million in funding. FHE is regarded as the "holy grail" of cryptography, enabling end-to-end data encryption, even during processing. "This new encryption chain aims to address multiple issues in crypto, including privacy and trust for Shiba Inu's extensive community of tens of millions and the next billion crypto-curious individuals," said Shiba Inu.

The new blockchain is intended to comply with regulatory requirements. "It's important that we maintain a project that conforms to international law while protecting the privacy of data, and security of individuals," Kusama said. "By allowing people to both be private yet still gain credentials to verify their identity, our entire system extends security and compliance at the same time."

Kusama declined to disclose the name of the Layer 3 blockchain to "ensure that there are no scammers" like fake TREAT tokens.

The new blockchain is slated to release a testnet in the third quarter of this year and the mainnet "after thorough testing," according to Kusama.