The world’s largest cryptocurrency exchange, Binance, has announced the launch of its own venture capital fund. Earlier this week, Binance Labs, the company’s venture arm, announced it had raised $500 million for its debut venture fund, with backing from venture capital firms DST Global and Breyer Capital and unnamed family offices and corporations. It follows Andreessen Horowitz’s announcement last week of a massive $4.5 billion fund intended to invest in crypto companies. Binance Labs will use the capital to invest in companies developing the so-called “Web3.”

Although still an undefined term, Web3 refers to a hypothetical future version of the internet that is more decentralized than online platforms today and incorporates blockchain, the technology behind most major cryptocurrencies. Binance’s new fund comes when bitcoin and other digital currencies are experiencing sharp losses. Despite reaching an all-time high of nearly $69,000 in November, the price of bitcoin has fallen by more than 50%. That has taken its toll on publicly traded crypto companies such as Coinbase, whose shares have declined 69% since the start of 2022. Some investors are concerned that the slump will extend to privately held crypto start-ups. While start-up valuations of $1 billion or more are “slowing down a bit,” there’s “no current impact in early-stage private markets,” Ken Li, Binance Labs’ executive director of investments and M&A, told CNBC. Binance Labs hopes to capitalize on the recent drop in digital assets to locate founders of what it considers the next big thing in technology. The fund will invest in pre-seed, early-stage, and growth equity, and it will purchase both equity and tokens.