Uncovering the "Dark Side" of Project Fundraising: Former Polychain Partner Niraj Pant Secretly Received Fees from Eclipse Labs
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Uncovering the "Dark Side" of Project Fundraising: Former Polychain Partner Niraj Pant Secretly Received Fees from Eclipse Labs
Polychain stated that Niraj Pant violated the fund's policies by secretly accepting "advisor" tokens from Eclipse.
Navigating Web3 tides with focused insightsBy Sam Kessler
Translated by DeThings
Editor's note: A former general partner at a top crypto venture capital firm, Niraj Pant, entered into a secret agreement with portfolio company Eclipse Labs under unclear timelines, sparking controversy. The incident has drawn attention to potential conflicts of interest and ethical standards in the venture capital industry, highlighting the complex relationships between investors and startups.
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Polychain says its former general partner Niraj Pant reached a secret deal with portfolio company Eclipse Labs that violated the fund’s policies.
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A CoinDesk investigation found Eclipse Labs’ former CEO Neel Somani promised Pant $13.3 million worth of Eclipse tokens.
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According to sources at Eclipse, Somani offered the tokens as an incentive for Pant to secure funding from Polychain.
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Polychain says Pant did not disclose the deal to the fund. Later, it invested in Pant’s AI startup Ritual.
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Pant confirmed Eclipse Labs allocated him “advisor” tokens but said he didn’t finalize any agreement until after Polychain had already invested.
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The situation offers a glimpse into the shadowy deals typical in crypto fundraising, where venture firms invest in projects in exchange for tokens instead of traditional equity.
Crypto venture giant Polychain has accused former employee Niraj Pant of entering into a backroom deal with portfolio company Eclipse Labs that breached the fund’s policies.
According to three people familiar with the matter and internal Eclipse documents reviewed by CoinDesk, Eclipse Labs’ former CEO Neel Somani quietly allocated 5% of the upcoming Eclipse cryptocurrency tokens to Pant—just days after Pant directed Polychain to lead the company’s $6 million pre-seed round.
That allocation was later reduced to 1.33%, worth $13.3 million based on the token’s fully diluted valuation in a recent private investment round. (A source close to Eclipse Labs said the company’s latest funding round valued the token at a $1 billion fully diluted valuation, or FDV.)
Founded by Olaf Carlson-Wee—the first employee at crypto exchange Coinbase—Polychain is one of the largest and most prominent crypto venture firms, managing over $11 billion in assets. Pant served as a general partner at the firm from 2017 to 2023, directing its investments into promising crypto startups.
Since then, Pant has become a notable figure in the crypto space and currently serves as co-founder of blockchain AI startup Ritual, another Polychain portfolio investment.
Eclipse Labs builds a blockchain that combines technology from the popular Solana and Ethereum networks. After leading Eclipse’s pre-seed round in August 2022, Polychain participated in a $50 million Series A round in March 2024.
Pant led the pre-seed deal, and a CoinDesk investigation shows he was allocated roughly the same number of Eclipse crypto tokens around the same time as Polychain itself. According to CoinDesk sources, the deal was not disclosed to most of Eclipse’s executives, advisors, or major investors.
Pant insists the arrangement was entirely above board, claiming it wasn’t finalized until September 2022—one month after Polychain had already invested in Eclipse. He shared legal documents with CoinDesk showing his “advisory” allocation of Eclipse tokens was modified to 1.33% in 2024, but declined to comment on the original size of his stake or why it changed.
Polychain told CoinDesk it only learned of Pant’s financial stake in Eclipse after he left the company in 2023. The fund said he should have disclosed the transaction under its policies, which are designed to protect the firm and its investors from conflicts of interest.
“Polychain only became aware of the financial relationship between Eclipse and Niraj Pant after Mr. Pant left the firm,” a Polychain spokesperson said in an email to CoinDesk. “Polychain has robust policies and procedures for employees taking on advisory roles. After Mr. Pant’s departure, the firm became aware he violated its policies and investigated the matter.”
Polychain’s statement to CoinDesk offers a rare behind-the-scenes look into the sausage-making of crypto venture capital—a world usually kept comfortable and quiet. Venture firms rarely discuss personnel matters or deal structures publicly, and Polychain did not publicly disclose Pant’s policy violation until CoinDesk reported on it.
Fuzzy Timeline
This revelation could deepen the controversial narrative surrounding Somani, who stepped down as Eclipse CEO in May amid allegations of sexual misconduct. Somani denies the allegations and declined to comment on this matter.
Two unnamed sources close to Eclipse claimed Somani promised Pant a 5% advisory share in Eclipse tokens before the pre-seed deal closed.
According to documents reviewed by CoinDesk, Pant’s stake exceeded that of any Eclipse investor except Polychain, which also holds 5% of Eclipse tokens. Pant’s share surpassed those granted to other advisors, investors, and all Eclipse employees except the former CEO.
According to two people familiar with the matter, Somani told his inner circle that the generous token grant was meant to incentivize Pant to bring in cash and the coveted endorsement of a seasoned venture capitalist from Polychain.
At the time, Polychain officials said, the arrangement was not disclosed to the venture firm or its limited partners.
Tokens Instead of Equity
The episode also sheds light on the unique fundraising norms in the crypto industry, where digital tokens are often granted alongside—or instead of—equity. Blockchain applications, digital assets, and decentralized ledgers are often promoted as more transparent alternatives to traditional finance, yet ownership structures of many leading projects and cryptocurrencies remain opaque.
Eclipse Labs builds a Layer 2 blockchain that gives users a faster, cheaper way to transact on the Ethereum network. The network’s main appeal lies in borrowing key elements from the popular Solana blockchain to power crucial parts of its tech design—a detail that helped it gain buzz across two of the biggest blockchain communities.
In Eclipse’s fundraising, token allocations were critical because few investors received equity in the project. Most were simply promised a slice of Eclipse’s tokens—a cryptocurrency that doesn’t yet exist and hasn’t even been publicly announced by Eclipse.
This setup isn’t atypical. Crypto investors frequently provide cash in exchange for tokens rather than traditional equity, and companies rarely disclose these arrangements publicly to avoid giving ammunition to financial regulators who might classify the crypto asset as a security.
“Eclipse Labs does not publicly disclose ownership percentages of investors,” a spokesperson for Eclipse Labs told CoinDesk.
According to an internal token allocation table reviewed by CoinDesk, Eclipse employees, investors, and advisors have already received nearly 50% of the future Eclipse token supply.
Pant insists his own advisory agreement with Eclipse was legitimate. He shared legal documents with CoinDesk showing he will receive a 1.33% stake in Eclipse tokens.
Excerpt from revised consulting agreement provided by Niraj Pant
That amount—revised from an earlier, undisclosed total—is lower than the initial 5% originally promised to Pant, as revealed in documents and by sources, but still exceeds the stakes held by all other Eclipse advisors, as well as nearly all investors and employees.
The consulting agreement Pant shared is dated April 29, 2024—after he left Polychain—and signed by two parties: Neel Somani, representing Eclipse Labs, and Niraj Pant, representing “The Psychological Operations Co.”
Excerpt from revised consulting agreement provided by Niraj Pant, signed by Pant and Neel Somani
Under the agreement, Psychological Operations Co. will receive a grant of Eclipse tokens in exchange for “regular call sync meetings” as requested by Eclipse. The agreement itself makes no mention of Polychain or its pre-seed investment in Eclipse.
The version of the agreement Pant provided to CoinDesk states it is a “revision” of an earlier consulting agreement dated September 8, 2022—just weeks after Eclipse’s pre-seed funding round concluded, while he was still a general partner at Polychain.
Pant declined to share the original agreement.
Polychain’s Policies
Regardless of whether Pant’s advisory role was finalized before or after the pre-seed deal, if his initial advisory engagement began while he was still working at Polychain—as his own documents suggest—he may still have been required to disclose it under the firm’s ethics policies, detailed in lengthy disclosures filed with the U.S. Securities and Exchange Commission (SEC).
Olaf Carlson-Wee, CEO of Polychain (Danny Nelson / CoinDesk)
In official policy documents submitted to the SEC, Polychain wrote: “To monitor for conflicts of interest, Polychain employees must pre-clear certain personal account transactions that may present the appearance of impropriety and must initially and annually disclose holdings in all personal accounts, as well as quarterly disclosure of all transactions.”
The situation is particularly notable because Pant is not just a former Polychain employee but also co-founder of Ritual, one of Polychain’s hottest portfolio companies.
After leaving Polychain last year to launch Ritual, Pant quickly rose as a featured speaker in the blockchain industry and is seen as a thought leader at the intersection of crypto and artificial intelligence. Ritual aims to decentralize the execution of AI models and is one of a class of projects where blockchain meets AI—already a favorite among venture capitalists. In November last year, it raised $25 million from Polychain and others.
Polychain declined to comment on whether its relationship with Ritual has changed due to Pant’s alleged policy violation, or whether it knew about the violation before investing in Ritual.
Despite the alleged policy breach, Polychain’s investment in Eclipse may still pay off. According to a source close to the fund, the value of its stake in Eclipse has grown tenfold since the firm first invested in 2022.
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