Polychain Says Ex-General Partner Niraj Pant Made Undisclosed Side Deal With Portfolio Company Eclipse Labs

Polychain says Niraj Pant broke the fund's policies by secretly accepting "adviser" tokens from Eclipse.

Crypto venture capital giant Polychain has accused Niraj Pant, a former employee, of making a backroom deal with portfolio company Eclipse Labs that broke the fund's policies.

According to three sources close to the situation and internal Eclipse documents reviewed by CoinDesk, Neel Somani, the former CEO of Eclipse Labs, quietly allocated Pant 5% of a forthcoming Eclipse crypto token in September 2022 – just days after Pant directed Polychain to lead the company's $6 million pre-seed funding round.

The allocation was eventually reduced to 1.33%, worth $13.3 million at the token's most recent fully diluted valuation in a private investment round. (According to a source close to Eclipse Labs, the company's latest funding round valued the token at a fully diluted value (FDV) of $1 billion.)

Pant insists the arrangement was completely kosher because it wasn't finalized until September 2022 – the month after Polychain had already invested in Eclipse. He shared legal documents with CoinDesk showing that his "advisory" allocation of Eclipse tokens was revised to 1.33% in 2024 but declined to comment on the size of his original stake, or why it was altered.

Polychain told CoinDesk it was unaware that Pant had a financial stake in Eclipse until after he left the firm in 2023. The fund said he should have disclosed the deal under its policies, which are meant to protect the firm and its investors against conflicts of interest.

"Polychain was unaware of the financial relationship between Eclipse and Niraj Pant until after his departure from the firm," a Polychain spokesperson said in an email to CoinDesk. "Polychain has robust policies and procedures surrounding employees serving in advisory roles. Following Mr. Pant’s departure from Polychain, the firm became aware that he violated its policies and investigated the matter."

Polychain's statement to CoinDesk grants a rare insight into the sausage-making process of the cozy world of crypto VC firms and the projects they fund. Venture firms rarely discuss personnel matters or deal structures publicly, and Polychain did not publicly disclose Pant’s policy breach until CoinDesk reached out for this story.

A murky timeline

The revelation could deepen the controversial narrative surrounding Somani, who stepped aside as Eclipse's CEO in May amid allegations of sexual misconduct. Somani denied those allegations and declined to comment for this story.

Two sources close to Eclipse who spoke to CoinDesk on the condition of anonymity claim Somani promised Pant his 5% advisory stake in Eclipse tokens before the pre-seed deal even closed.

According to documents reviewed by CoinDesk, Pant's stake was higher than that of any Eclipse investor except Polychain, which was also slotted for 5% of Eclipse's token. Pant's stake exceeded the allocations to other advisers, investors and every Eclipse employee except for the former CEO.

Somani told his inner circle that the generous token grant was meant to incentivize Pant to secure Polychain's cash and the veteran VC's coveted endorsement, according to two people familiar with the matter.

According to Polychain officials, the arrangement was not disclosed to the venture capital firm or its limited partners at the time.

Tokens, not equity

The episode also provides a glimpse into the dealings that have come to typify the crypto industry's unique fundraising norms, with digital tokens often granted alongside any equity, or in lieu of it. Blockchain apps, digital assets and decentralized ledgers are often pitched as a more transparent alternative to traditional finance, but the ownership structures of many leading projects and cryptocurrencies remain opaque.

Eclipse Labs builds a layer-2 blockchain that offers users a faster and cheaper way to transact on the Ethereum network. The network's main draw is that it borrows elements of the popular Solana blockchain to power key elements of its technical design – a detail that has helped it earn buzz across two of the largest blockchain communities.

In the case of Eclipse's fundraising, the token allocations were crucial because few investors received equity in the project. Most were simply promised a cut of Eclipse's token – a cryptocurrency that doesn't exist yet and that Eclipse has not even publicly announced.

This setup isn't atypical. Crypto investors frequently offer cash in exchange for tokens rather than traditional equity, and companies rarely disclose these arrangements to the public, lest they arm financial regulators with ammunition in their fight to classify cryptocurrencies as investment securities.

"Eclipse Labs does not disclose investor ownership percentages to the public," a spokesperson for Eclipse Labs told CoinDesk.

According to internal token allocation tables reviewed by CoinDesk, Eclipse's employees, investors and advisers have already been promised nearly 50% of the supply of a future Eclipse token.

Pant's own advisory agreement with Eclipse was above board, he insists. He shared legal documents with CoinDesk showing that he is set to receive a 1.33% stake in Eclipse’s

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