Multicoin Capital leads $20M investment in a blockchain that timestamps transactions mathematically

Quick Take

  • Multicoin Capital is leading a $20 million Series A in blockchain startup Solana, with the participation of BlockTower Capital, Passport Capital, Foundation Capital, Slow Ventures, and others
  • The startup is developing a scalable blockchain that relies on a unique technique that can prove the order of transactions mathematically 

Throw a stone at any blockchain conference and there's a 50/50 shot you will hit someone who is developing a new blockchain. Even with this level of saturation, VCs’ appetite for more blockchain projects remains insatiable. 

Multicoin Capital, BlockTower Capital, Passport Capital, Distributed Global, Foundation Capital, Slow Ventures and others are throwing $20 million into blockchain project, Solana, which claims to process 50,000 transactions per second (TPS), according to an announcement on Tuesday.

The San Francisco-based startup prides itself on being a scalable, layer 1 blockchain that does not involve the security risk usually associated with sharding, a technique projects such as Ethereum and Telegram Open Network are exploring to scale their blockchains. 

“What stands out about us is that we are not sharding,” said Solana CEO Anatoly Yakovenko. “Every other project that is working on scaling is working on sharding, and sharding sacrifices security. There is no other way around it.”  

Indeed, Ronghui Gu, a computer science professor at Columbia University and the founder of another blockchain project named CertiK, agrees that Solana's approach can eliminate 1% shard attack. However, he also points out that "I don't think Solana’s approach of using block history as a time source has an inherent impact on security. The trade-off here is mostly on its assumption of attack frequencies and patterns. In some cases, it could face serious resource contention and congestions."

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