Solana Labs, the developer of the Solana blockchain, has raised $314.15 million in a private token sale round led by Andreessen Horowitz (a16z) and Polychain Capital.
Other participants in the round included Alameda Research, CMS Holdings, CoinShares, Jump Trading, Multicoin Capital, Sino Global Capital, and many others. The news comes a few days after some reports said Solana could raise anywhere from $300 million to $450 million.
With fresh capital at hand, Solana Labs plans to launch an incubation studio to speed up the development of projects building on the Solana blockchain and set up a venture investing arm for the Solana ecosystem.
What is Solana?
Launched last year, Solana is seen as a competitor to Ethereum, which today remains the largest blockchain platform for decentralized projects and applications. Solana, however, is faster and cheaper than Ethereum for executing transactions.
Ethereum’s current capacity is about 15 transactions per second. Solana’s capacity, on the other hand, is around 50,000 transactions per second. As for cost, Ethereum’s average fee per transaction is about $6, while Solana’s is around $0.00001. (Ethereum’s fees are expected to drop when it moves to a proof-of-stake system).
“We are convinced that scalability and throughput in blockchain are now a solved problem,” said Anatoly Yakovenko, co-founder and CEO of Solana Labs. “The next phase is onboarding a billion users.”
A growing network
The number of projects building on Solana is increasing. There are already more than 90 projects in Solana’s ecosystem, as The Block Research reported earlier this year. Some of the most notable projects include Serum, Raydium, Maps.me, and Pyth Network.
Still, Solana has a long way to go. The total value locked (TVL) in Solana’s DeFi ecosystem is currently way smaller than Ethereum’s. The TVL of Ethereum projects is over $59 billion, whereas the TVL of Solana projects is less than $1 billion.
Solana could “massively scale” the DeFi ecosystem, according to Polychain Capital’s managing partner Olaf Carlson-Wee. “In our view, Solana is a compliment to Ethereum,” he said. “We’re thrilled to see strong developer activity and a continually expanding community grow around the project.”
The private token sale round brings Solana Labs’s total funding to date to more than $335 million. The project has previously raised $20 million in a Series A in 2019 and $1.8 million via CoinList last year.
© 2021 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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