Matter Labs has raised $200 million in a Series C funding round to develop its zkSync protocol. The second-generation scaling network is eagerly awaited by developers due to its ability to natively support Ethereum-based applications.
Matter Labs, creators of the highly anticipated Ethereum Layer-2 scaling protocol ‘zkSync’, has raised $200 million in a Series C funding round led by Blockchain Capital and Dragonfly. The raised funds will be used to launch applications by Matter Labs and third-party developers on zkSync, and also grow the Matter Labs team. The company will also set up a Matter University, which will operate as an onboarding and educational platform for users and builders.
In October, Matter Labs released an upgraded version of its protocol dubbed “zkSync 2.0” on the mainnet in a restricted ‘Baby Alpha’ testing phase. The protocol became the first ZK-Rollup (zero-knowledge proof) to hit production that is able to host Ethereum Virtual Machine (EVM) compatible applications like decentralized exchanges (DeFi) and assets like non-fungible tokens (NFT) out of the box.
ZK-Rollups are second generation off-chain scaling networks that are able to combine a large number of transactions on the Ethereum blockchain and process them as a single ETH transaction. Unlike the first generation scaling solution – ‘Optimistic Rollups’, which assumes a transaction is right until proven wrong, ZK leverages ‘Validity Proofs’ technology to verify transactions instantaneously. This helps ease network congestion on Ethereum and help the blockchain process transactions at faster and cheaper rates.
zkSync’s native compatibility with EVM has been key in attracting Web3 developers who wish to port their applications from Ethereum to mainnet of the L2 scaling solution in a process called zkEVM. Blockchain experts say that there is a race against time between scaling networks to see who can build the most optimal zkEVM. It is considered the most efficient and advanced scaling solution for Ethereum yet.
In the ‘Baby Alpha’ testing phase, Matter Labs will only conduct network stress and security tests on zkSync 2.0. Developers will be able to port and test their EVM applications using zkEVM in the second phase of testing called the ‘Fair Alpha’. The third and final testing phase will see Matter Labs open the protocol for public testing once it obtains MIT’s Open Source Initiative (OSI) license which is expected to happen by the end of the year.
According to Matter Labs, over 150 blockchain projects are currently working with the company to develop applications using zkSync. This includes prominent protocols like Chainlink, SushiSwap, Uniswap, Aave, Argent, 1inch, Gnosis and Curve. Uniswap, the world’s largest decentralized exchange (DeFi), announced that it will be porting the application to zkSync.
Matter’s funding round was also contributed to by LightSpeed Venture Partners, Variant, and A16z – the Web3 funding arm of VC giant Andreessen Horowitz. The latest round puts the total amount raised by Matter Labs at $458 million. The company claims this funding ensures that the project does not face capital constraints as it will now focus on developing the zkSync ecosystem. Interestingly, Matter Labs’ funding comes during a period of uncertainty in the crypto market that was enhanced by the debacle of FTX and sister firm Alameda Research.
“No matter how bad this bear market gets, we are well positioned to grow our team, ship our protocol, and ship our mission,” said Steve Newcomb, Chief Product Officer of zkSync.
Also Read UK Is Preparing To Bring DAOs Under Law