Recently, the world's first network state project, Praxis, announced that it has raised $525 million in funding, drawing significant attention. However, the investment tactics of GEM Digital, one of the investors, have raised concerns. Founded in 2021, Praxis aims to accelerate technological progress and revitalize Western civilization, boasting over 14,000 members. The project plans to build a new city, initially covering approximately 1,000 acres of land, with a capacity for 10,000 people. Nonetheless, GEM Digital's involvement and its commonly used investment pledge methods have led to skepticism regarding this funding.

With leaders like Vitalik and Balaji advocating for network nations, an increasing number of builders are joining and expanding the narrative. Recently, Praxis, claiming to be the world's first network nation project, announced it has raised up to $525 million in funding, drawing significant attention. However, the prior investment controversies surrounding GEM Digital, one of the investors, cast doubt on this massive financing. On October 16, Praxis announced it had secured $525 million in funding, which will be used to accelerate the speed and quality of transactions with governments and landowners to build a cutting-edge technology city. This round of investment includes Arch Lending, GEM Digital, Manifold Trading, as well as Dan Romero, CEO of Farcaster, Tom Schmidt, partner at Dragonfly, Rob Hadick and Anirudh Pai, CEO of ETHGlobal Kartik Talwar, CEO of Helius Labs Mert, co-founder of Worldcoin Max Novendstern, and Will Price, data scientist at Flipside Crypto. Previously, Praxis also raised $4.20 million in a seed round in 2021 with participation from Bedrock Capital, Winklevoss Capital, and Alumni Ventures, and completed a $15 million Series A funding in 2022 with investments from Paradigm, Alameda, Three Arrows Capital, and Robot Ventures. Founded in 2021 and led by 28-year-old co-founder Dryden Brown, Praxis describes itself on its official website as an internet-native alliance aimed at accelerating technological progress and revitalizing Western civilization, boasting over 14,000 Praxians across 84 countries, with the companies founded by its members valued at over $400 billion. One of Praxis's core objectives is to build a new city for three reasons: (1) to unleash technological and scientific potential: by constructing a city in talent-rich acceleration zones, regulatory barriers are reduced, fostering rapid development in fields such as artificial intelligence, cryptocurrency, biotechnology, and energy; (2) to create a bolder and better way of life: through cultural and institutional development; (3) to demonstrate to the world the possibility of building great cities in the 21st century. According to the Wall Street Journal, Praxis has not yet determined a specific city location, though Latin America and the Mediterranean region are potential candidates, with a final decision expected in the first quarter of 2025. Dryden Brown disclosed that the project initially plans to cover approximately 1,000 acres of land, accommodating 10,000 people. Additionally, Zaha Hadid Architects has provided a conceptual plan for the city construction, merging futurism with classical aesthetics and scalable urban planning, with development work to be overseen by former Howard Hughes Corporation CEO David Weinreb. Despite the growing popularity of the network nation concept, Praxis's substantial financing is surprising, and GEM Digital's involvement raises further questions about the investment. "Seeing institutions like BlackRock commit to cryptocurrency, we designed a crypto-native mechanism to finance large projects using tokenized real-world assets (RWA) in collaboration with the largest new city development project in the Middle East, Global Emerging Markets. This financing is also the first application of this withdrawal mechanism," Praxis stated in its funding announcement. This financing mechanism typically means that borrowers can draw funds gradually based on project progress or needs rather than receiving all the funds at once. In fact, according to the Wall Street Journal, Jonathan Collins, CEO of GEM Digital, revealed that the company contributed $500 million of the funding. In return, Praxis must provide GEM with tokens representing future real estate development ownership, meaning that Praxis can only access these funds after the tokens are launched. The remaining funds will also be released in phases based on milestone events, such as obtaining local government permits, purchasing construction land, tokenizing land ownership, and starting construction. This performance-based investment is a common tactic used by GEM Digital. According to previous reports from PANews and Chain Catcher, "investment commitments" are a common practice for GEM, with dozens of unknown crypto projects announcing financing news through such commitments, when in reality, GEM signs large investment agreements with dubious projects, creating market hype to deceive the media and profit through coordinated sell-offs. Some crypto projects have even disclosed that GEM Digital's investment funds are not paid directly but are filled by profits from selling the tokens. Additionally, the Wall Street Journal also reported that Arch Lending will provide the remaining $25 million, so the combined investment from these two institutions has already reached $525 million. Does this mean that the other investors are merely nominal and not contributing funds? Thus, it appears that Praxis may again be a part of GEM Digital's capital manipulation game.

Is GEM Digital Replaying the Capital Manipulation Game? Praxis Secures Over $500 Million in "Commitments", Yet Funds Have Not Arrived