The open source, community-led blockchain project Qtum announced this week that the group has raised $1 million in seed funding from angel investors.

The group seeks to merge the capabilities of the two most popular blockchain ecosystems—Bitcoin and Ethereum—to allow developers to create decentralized applications and execute smart contracts. Core development of Qtum’s application stack and blockchain is done by Quantum Foundation, an organization registered in Singapore.

The project’s list of investors includes a bevy of high-profile blockchain technology moguls such as Ethereum co-founder Anthony Di Iorio, Augur co-founder Jeremy Gardner, OkCoin Chief Executive Star Xu and a host of other prominent names.

Qtum is a fork of Bitcoin Core 0.13 that integrates code from the Ethereum Virtual Machine and an “account abstraction layer” that allows Ethereum smart contracts to run on the platform with minimal changes. The usefulness of this sort of approach is complicated, but the design is to take Ethereum’s powerful smart contact system and allow it to run with Bitcoin’s transaction-based design.

The problem is that Bitcoin and Ethereum are fundamentally incompatible, but each exhibits extremely useful capabilities. One major industry interested in blockchains is the financial technology sector. The power of an immutable ledger of historical transactions would be extremely useful, such as with Bitcoin. At the same time, the industry could benefit from programmable transactions that Ethereum enables.

Road to a token crowd sale

The project’s founder, Patrick Dai, indicated to CoinDesk that the $1 million investment will help the team prepare Qtum’s infrastructure to sell cryptocurrency tokens produced by the platform for a crowd sale.

“We raised the money to prove that our approach is right,” Dai said. “We used the money to do the minimum viable product. The testnet is live now, but it is private, it is already working.”

Dai said the crowdfunding would seek to raise up to $10 million during the token offering. Blockchain and cryptocurrency startups commonly use crowd sales of tokens or initial coin offerings in order to raise initial capital. In 2015, blockchain-based online game “Spells of Genesis” by EverdreamSoft SA and virtual reality content marketplace Voxelus Inc. used token sales to raise capital—EverdreamSoft raised $346,000 and Voxelus raised $350,000. Also in 2015, Augur’s predictive marketplace raised $1.3 million in its own crowd sale. In 2016, the Ethereum Decentralized Autonomous Organization, the DAO, raised over $130 million in ETH, the Ethereum token.

According to an analysis by Smith + Crown, crowd sales and coin offerings have raised over $270 million within the industry over the past three years.

Featured image credit: Bitcoin and Ethereum logos.