Matter labs 50m series cryptomatneytechcrunch

matter labs 50m series cryptomatneytechcrunch

Layer-2 (L2) blockchains, which build on the Ethereum network, offloading the computational stresses while still writing transaction data to the main network.

StarkWare, which builds an Ethereum scaling solution called StarkNet, has just closed a $50 million Series C led by Sequoia Capital. The raise comes several months after the firm raised a $75 million Series B led by Paradigm, a crypto VC firm co-led by former Sequoia Capital partner Matt Huang.

This latest raise values the Israeli startup at a whopping $2 billion.

Crypto VC firm Paradigm debuts monster $2.5 billion fund

As the Ethereum network continues to swell in popularity despite traction from competing blockchains with deeper efficiency, investors are starting to dump more money into the infrastructure startups aiming to help Ethereum scale to more users and more transaction volume.

Meanwhile ZK rollups leverage complex mathematical proofs, which allow the Ethereum network to quickly verify and accept the legitimacy of a given transaction batch.

Matter Labs isn’t the only group building a ZK rollup product, but their primary advantage is that they’re already deep in testing a solution to help Ethereum developers not only process transactions inside zkSync but also operate smart contracts based on the Solidity programming language natively inside of the product.

“It has tended to be the case historically that ZK-based scaling solutions forced developers to learn a new programming language,” a16z Crypto general partner Ali Yahya tells TechCrunch.

Sync, has successfully raised fresh $50 million in a Series B funding round.

In a November 9 announcement, Matter Labs confirmed the successful completion of its Series B funding round led by Andreessen Horowitz.

The finding initiative also saw participation from existing investors such as Placeholder and Dragonfly Capital.

The recent round follows an initial Series A funding that successfully secured $6 million in February this year. At the time, the funding initiative saw participation of many new investors, including, ConsenSys, and OKEx.

Matter Labs now intends to use the funds to develop the Ethereum Layer two rollups solution, focusing on facilitating low-cost payments.

By design, rollups are the second-layer scaling solution that “roll-up” transactions data in batches for more efficient processing on Ethereum’s layer-one.

What this means functionally is that developers can earn the benefits of speedier and cheaper transactions without having to lose the security of the Ethereum ecosystem.

Matter Labs is one of a handful of blockchain startups building out a sophisticated rollup product, but the team believes that their solution zkSync is destined to beat out the competition. The startup tells TechCrunch it has just closed a $50 million Series B investment led by a16z Crypto just months after closing a Series A led by Union Square Ventures.

Ethereum scaling is a serious business, with just a few major players; a16z Crypto already backed one this year, leading the February Series A of developer Optimism. In August, Lightspeed backed Offchain Labs, maker of Arbitrum — another Ethereum scaling solution with a lot of developer interest.

The new rollups solution uses zero-knowledge proofs to minimize the data held in these batches. As a result, the protocol reduces the computing and storage resources required to validate blocks.

In that context, the protocol will build on the current iteration by supporting Ethereum Virtual Machine (EVM)-compatible smart contracts.

While explaining zkSync v2 protocol functionality, Dan Boneh, Professor of Computer Science at Stanford University, said:

“zkSync will enable Ethereum transactions at a much higher rate and lower gas fees than mainnet. The math used by Matter Labs is really quite beautiful, and it is remarkable to see this coming to fruition at a massive scale so soon.”

In the meantime, the first version of zkSync v2 is currently live on testnet, with a port Uniswap v2 dubbed “UniSync” ready for an experiment.

Matter Labs, the company behind zkSync, an Ethereum layer-2 scaling protocol, announced today it received USD $50 million in new funding (in addition to a USD $6M Series A in February of this year). These new funds will be used to expand Matter Labs’ engineering teams and finance business growth.

zkSync uses advanced math to scale Ethereum in a fully trustless manner.

”It is a mission-driven project,” said Alex Gluchowski, Co-Founder and CEO of Matter Labs, “our long-term goal is to make self-sovereign participation in the digital economy — that is, maintaining true control over one’s digital assets — affordable for anyone in the world.”

The Series B financing was led by Andreessen Horowitz and included existing investors Placeholder, Dragonfly, and 1kx.

AAVE, Paraswap, Lido, Futureswap, Gnosis, Rarible, Aragon, Liquity, Celer, Connext, Perpetual, Euler, Opium, and a host of others.

“Until recently, we have been focused nearly exclusively on technological innovation. Now it’s time to put a similarly concerted effort into reaching users and developers, which will require scaling our business development and marketing efforts and building out our community and ecosystem,” said Zoé Gadsden, COO of Matter Labs.

A pioneer of Zero-Knowledge Proof technology on Ethereum, Matter Labs launched the first-ever public ZK rollup prototype in early 2019

Fully inheriting Ethereum’s security guarantees, zkSync adopts the ZK rollup architecture — the only blockchain scaling approach that relies on pure cryptography instead of collectively trusted validators, bridges, or watchers.

Labs backed by Andreessen Horowitz. In August, Lightspeed backed startup Offchain Labs in a raise that valued the blockchain scaling company at $1.2 billion.

Despite being one of the more renowned investment firms in the tech sector, Sequoia has been slower to fully embrace crypto startups, leaving competitors like Andreessen Horowitz space to back more early players through dedicated funds. Sequoia first backed StarkWare back in 2018, though this is the first time leading a round for the startup. A recent report from The Information detailed that a quarter of Sequoia’s new investments this year were made in blockchain startups.

“The main thing that distinguishes us in the L2 ecosystem… is that we are basically servicing the largest throughput today in terms of both transactions and volume across all the [L2] solutions out there,” co-founder Eli Ben-Sasson tells TechCrunch.

As some of the most popular cryptocurrencies reach all-time highs, plenty of new users and decentralized app developers are embracing the Ethereum network and quickly discovering that the blockchain remains a pretty crowded place to do business. Ethereum’s insufficient network volume limits have led to slow transactions and prohibitively pricey fees, but it’s a familiar problem for longtime developers in the ecosystem.

What is new is the wider availability of so-called Ethereum “rollup” scaling solutions. These developer products reduce the traffic on the central Ethereum blockchain by offloading the hard work of processing transactions to efficient secondary chains that record data of transaction batches to the main Ethereum network.

We’ve settled over $200 billion and settled over 50 million transactions.”

StarkWare’s particular scaling solution is what’s called a zero-knowledge rollup; it processes a number of transactions on its platform and inscribes the bundled data to the Ethereum network. Unlike competing “optimistic rollups,” which rely on a network of validators to ensure that the bundled data is legitimate after it’s published, zero-knowledge proofs leverage cryptography to mathematically ensure that everything is up to snuff before publishing it. Those cryptographic proofs require more computational effort than other solutions, but their more secure architecture has led plenty of developers to believe they are the future of scalability for the Ethereum network.

Some of StarkWare’s customers include ConsenSys, Immutable, dYdX and Sorare.

Matter Labs] has succeeded in building a compiler for Solidity that takes down normal smart contracts that run on Ethereum to a zero-knowledge proof so that they can be used with [zkSync].”

In the short-term there are some clear advantages for optimistic rollups, chief of which is that many of them are already publicly available to developers with wide capabilities. While zkSync is already live on the Ethereum mainnet, mainnet support for smart contracts won’t arrive until early next year, the company says. Matter Labs CEO Alex Gluchowski expects ZK rollups to reign supreme soon enough though, an opinion notably shared by Ethereum co-creator Vitalik Buterin who wrote in a January blog post that “in the medium to long term ZK rollups will win out in all use cases…”

“I don’t see a world where optimistic rollups remain in the very near term,” Gluchowski tells TechCrunch.

Both developers are building a type of rollup called an “optimistic rollup,” Matter Labs is building a similar product called a “ZK rollup” that takes a notably different approach leveraging zero-knowledge (ZK) proofs to scale transactions in a manner that’s fundamentally more secure but is also much more computationally intense.

Offchain Labs raises $120 million to fix Ethereum’s shortcomings with its Arbitrum product

The differences between the two are fairly technical, but they essentially differ in the way that the legitimacy of the transactions inside the rollups are determined. Blockchains work by various nodes across a network reaching a consensus for what the verified history of transactions on said network looks like.

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