Recently, the self-proclaimed world's first network nation project, Praxis, announced it has secured up to $525 million in funding, attracting significant attention. However, the previous investment controversies surrounding GEM Digital, one of the investors, raise questions about this substantial financing.

Written by: Nancy, PANews

With leaders like Vitalik and Balaji promoting network nations, more builders are joining in and expanding the narrative's growth space. Recently, the self-proclaimed world's first network nation project, Praxis, announced it has secured up to $525 million in funding, attracting significant attention. However, the previous investment controversies surrounding GEM Digital also raise questions about this substantial financing.

Once again announcing over $500 million in funding to build a cutting-edge technology city

On October 16, Praxis announced it has secured $525 million in funding, which will be used to accelerate the speed and quality of transactions with governments and landowners to build a cutting-edge technology city.

The round of investors includes Arch Lending, GEM Digital, Manifold Trading, as well as Farcaster CEO Dan Romero, Dragonfly partners Tom Schmidt, Rob Hadick, and Anirudh Pai, ETHGlobal CEO Kartik Talwar, Helius Labs CEO Mert, Worldcoin co-founder Max Novendstern, and Flipside Crypto data scientist Will Price.

Previously, Praxis also secured $4.2 million in seed funding in 2021 with participation from Bedrock Capital, Winklevoss Capital, and Alumni Ventures, and completed a $15 million Series A funding round in 2022 with investments from Paradigm, Alameda, Three Arrows Capital, and Robot Ventures.

Founded in 2021, Praxis is led by 28-year-old co-founder Dryden Brown. According to its official website, Praxis is an internet-native alliance aimed at accelerating technological progress and revitalizing Western civilization, with over 14,000 Praxians distributed across 84 countries, and the companies founded by its members valued at over $400 billion.

One of Praxis's core goals is to build a new city for three reasons: (1) to unleash technological and scientific potential: by building cities in talent-dense acceleration zones, regulatory barriers are reduced, thus promoting rapid development in fields such as artificial intelligence, cryptocurrency, biotechnology, and energy; (2) to create a braver and better way of life: through cultural and institutional development; (3) to demonstrate to the world the possibility of building great cities in the 21st century.

According to The Wall Street Journal, Praxis has not yet determined a specific city location, with Latin America and the Mediterranean region being potential candidates, with a final decision expected in the first quarter of 2025. Dryden Brown revealed that the initial plan covers approximately 1,000 acres of land, accommodating 10,000 people.

Additionally, Zaha Hadid Architects has provided a conceptual plan for the urban construction of Praxis, combining futurism with classical aesthetics and scalable urban planning, with development work to be led by former Howard Hughes Corporation CEO David Weinreb.

GEM Digital as the lead investor has a history of fraudulent financing

Despite the growing popularity of the concept of network nations, the scale of Praxis's financing is surprising, and GEM Digital's involvement has raised significant doubts about this investment.

"Seeing institutions like BlackRock committed to cryptocurrency, we designed a crypto-native mechanism to finance large projects using tokenized real-world assets (RWA) and partnered with the largest new city development project in the Middle East, Global Emerging Markets. This financing is also the first application of this withdrawal mechanism," Praxis stated in its financing announcement. This financing mechanism typically refers to borrowers being able to withdraw funds gradually over a specific period based on project progress or needs, rather than receiving all funds at once.

In fact, according to The Wall Street Journal, GEM Digital CEO Jonathan Collins disclosed that the company contributed $500 million of the funding. In return, Praxis must provide GEM with tokens representing future real estate development ownership, meaning that Praxis can only access these funds after the tokens are launched. The remaining funds will also be disbursed in phases based on milestone events, such as obtaining local government permits, purchasing construction land, tokenizing land ownership, and starting construction.

This performance-based investment is a common tactic used by GEM Digital. According to previous reports by PANews and Chain Catcher, "investment commitments" are a common trick of GEM, with dozens of unknown crypto projects announcing financing news through investment commitments, but in reality, GEM signs so-called large investment agreements with junk project parties to create market-positive news to deceive the media, collaborating to manipulate the market for profit sharing. Some crypto projects have even disclosed that GEM Digital's investment funds are not directly transferred but are filled by profits from selling the tokens.

Additionally, The Wall Street Journal reported that Arch Lending will provide the remaining $25 million, meaning that the total investment from these two institutions has reached $525 million. Does this imply that the other investors are merely nominal and not contributing funds?

From this perspective, Praxis may once again be a capital manipulation game orchestrated by GEM Digital.

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