While initial coin offerings (ICOs) have fast become the breakout method for blockchain fundraising, at least one industry startup thinks there's still a place for traditional venture capital in this new economic movement.

Today, New York-based Blockstack is launching a $25 million venture capital fund aimed at jumpstarting a new, decentralized version of the internet. But more notable than the money, is who's allocating it. Unlike the many ICOs that are raising funds through retail investors, the Blockstack Signature Fund will only distribute money from active venture capitalists.

As such, Blockstack co-founder Muneeb Ali positioned the fund as a way to bring together decentralized app builders and the venture capital community.

Ali told CoinDesk:

The fund is backed by venture capital firms Lux Capital, OpenOcean, RisingTide Capital, Compound and VersionOne.

Each firm has committed resources to the fund, and will evaluate investment opportunities in exchange for a stake in the innovator's company on a case-by-case basis. Currently, Blockstack isn't releasing the fund's expected average investment size, but those involved predict it will be equivalent to a traditional Series A funding round.

"We think that traditional venture capital has its place, and a very important place in this ecosystem, along with these new ways of raising money," Ali said.

That's not to say the company is eschewing the ICO strategy for itself, however.

Founded in 2013, Blockstack has so far raised $5.45 million in venture capital to build a decentralized protocol layer that sits on top of a number of blockchains, including bitcoin, ethereum and zcash.

With an entire stack of tools similar to those provided by Apple to its app developers, and a recently released decentralized internet browser the founders compare to Netscape, Blockstack hopes to integrate any number of distributed ledgers into a single layer that's easily browsable from any device.

But to get to that next step, Blockstack plans to raise additional funding via an ICO, in which it will sell its own cryptocurrency to set a precedent for other apps that will use its platform.

According to Ali:

Blockstack also revealed that it's in the early stages of launching an award, modeled after the renowned XPRIZE established by entrepreneur Peter Diamandis and Google director Ray Kurzweil to incentivize radical technological development that benefits humanity.

While original XPRIZE participants have created everything from space travel solutions to Star Trek-inspired medical devices, Blockstack's "x-prize" will be focused on motivating developers to build solutions to some of blockchain’s oldest unfulfilled promises, ranging from a decentralized Twitter to a decentralized publishing platform like Medium.

Details about which investors will back the awards are forthcoming, but Ali hinted that two of Blockstack's most well-known investors might be keen, saying:

Disclaimer: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Blockstack and Zerocoin Electric Coin Company (developer of zcash).

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