fomo Co-founder Se Yong: Crypto VCs More Likely to Increase Liquid Holdings
Se Yong, co-founder of trading app fomo, stated that many crypto venture capitalists are either starting to invest in projects outside of pure crypto or increasing their liquid holdings, with most finding the latter easier. The reason is that venture capital is not liquid fund management; it must present a "consensus memo" that makes sense to LPs.
He wrote in late 2025 that by 2026, a large number of crypto VCs would shift towards liquid tokens. The constraints of the primary market are cycles and exits: project valuations have fallen from the peak in Q4 2025, while spot ETPs and digital asset treasury companies have diverted allocations that could have gone into funds. According to Galaxy, in Q2 2026, private placements related to crypto and blockchain amounted to approximately $5.6 billion across 384 deals, a quarter-on-quarter increase of about 31%, mainly driven by later rounds, with the correlation to coin prices weakening. During the same period, Framework raised $400 million for a "frontier technology" fund covering crypto, artificial intelligence, robotics, and energy; Paradigm is reportedly raising a broader frontier fund; and Haun's second fund of about $1 billion also includes financial services and the intelligent economy. Stepping out of crypto requires rebuilding industry networks, and increasing liquid holdings only requires creating consensus warehouses within existing tokens that can be defended to LPs.
fomo itself is focused on another aspect: social trading, multi-chain memes, and perpetual contracts. In June 2026, it raised $75 million in Series B funding at a valuation of $550 million, led by Index, with participation from Union Square Ventures and Benchmark; the product has added Hyperliquid-driven perpetuals, web-based trading, and TradingView. As liquid holdings thicken, it means VCs and end applications are competing for the same tradable chips, rather than just writing checks for seed rounds.
Who is buying and who is selling: buyers are seeking liquidity that can be explained to LPs, while sellers are offering pure protocol stories locked for ten years. The events are driven by industry observations, with funds shifting from seed rounds to tokens and later rounds. Beneficiaries are platforms that can manage both private equity and secondary markets, while those under pressure are projects that can only tell a decentralized narrative and cannot provide liquidity exits. The consensus memo is not the best technology; it is the name that is easiest to pass through the investment committee.
No specific fund holdings were listed in the remarks; the $5.6 billion for Q2 is an industry aggregate rather than specific to their company.
Source: Public Information
ABAB AI Insight
The skill in crypto venture capital is writing memos, not monitoring markets. When LPs ask "why will this investment break even," liquid tokens have a price, while seed protocols only have stories. Thus, when the cycle cools, priced warehouses appear in the books first, rather than learning about robotic supply chains.
The capital path is a migration of allocations. ETPs and treasury companies have transformed "I want crypto exposure" from ten-year funds into stocks and notes that can be sold the next day. If VCs cannot prove they are worth more than beta, they can only turn part of their committed capital into a consensus token basket. Cross-industry requires a new due diligence language, and most partners cannot pass the first year. fomo has turned trading into social interaction, capturing retail on the same liquidity layer; VCs increasing liquid holdings provide institutions with a step up on the same liquidity layer.
The benchmark is crypto funds that also engage in secondary markets post-2018, as well as traditional VCs buying stocks of public companies during the software winter. The industry phase has shifted from protocol hunting to exposure management. Whoever can incorporate consensus warehouses into fund documents will survive the years without IPOs.
Structural judgment belongs to capital concentration. The mechanism is that the lock-up period of the primary market does not match the explainability of the secondary market, leading money to flow towards tools that can simultaneously satisfy LP quarterly reports. Therefore, consensus is not cognition, but governance: the investment committee needs a name that can be read aloud on a conference call. Pure crypto stories still exist, but they must first pass through the liquidity checkpoint.
ABAB News · Law of Cognition
Warehouses that can be explained to LPs come before the best technology
Venture capital increasing liquid holdings is a surrender to quarterly reports
The consensus memo is not a belief; it is the language of the investment committee