Offchain Labs Inc., a provider of solutions to scale up the Ethereum blockchain, today announced that it has raised $120 million in funding to launch its Arbitrum One mainnet to the public.
The Series B funding round was led by Lightspeed Venture Partners and joined by Polychain Capital, Ribbit Capital, Redpoint Ventures, Pantera Capital and others.
The Ethereum blockchainis a decentralized public ledger for verifying and recording transactions, enabling users to create, publish, use and make money from applications on the platform and use its Ether cryptocurrency as payment. These decentralized applications on the network are known as “dApps.”
But Ethereum has long had issues with scaling up and with congestion as its popularity has increased. Transaction times and fees constantly burden developers even as markets surrounding the ecosystem have exploded over the past year.
Ethereum’s core developers have been attempting to resolve these issues with upgrades to the protocol itself but resolutions are still months to a year away. As a result, so-called Layer 2 solutions are being sought out, and Arbitrum One is one such solution.
Layer 2 solutions execute transactions outside the main Ethereum layer using a developer-friendly mechanism called “optimistic rollups” that batch transactions, allowing them to execute quickly and with less congestion. That means they happen faster and with lower transaction fees.
When they complete, they are also recorded back to the main Ethereum blockchain. In the case of Arbitrum One, it is also compatible with the Ethereum virtual machine, so developers do not need to change their contract code and can do so without compromising security.
Offchain Labs was co-founded by Chief Scientist Ed Felten, former deputy U.S. chief technology officer in the Obama White House and professor at Princeton University. Felten began work on Arbitrum while at Princeton alongside co-founders Chief Executive Steven Goldfeder and Chief Technology Officer Harry Kalodner who published the technology in 2018.
“The tremendous support we’ve seen from developers across the globe validates our mission to be the first to marry the world of Fintech and Defi,” said Goldfeder.
Arbitrum One went into beta May of this year and has amassed a number of launch partners, including winning the high-profile Reddit Scaling Bake-off. According to Offchain Labs, more than 350 more teams have signed up to use the rollup network, giving it broad appeal in the blockchain industry.
Offchain Labs intends to use the influx of new funds to further develop its ecosystem, scale its internal developer team, build out new scaling solutions and invest in research and development.
“We’ve had the pleasure of working closely with Steven, Ed and Harry,” said Amy Wu, partner at Lightspeed. “Their dedication to the Ethereum developer community is second to none and they have the best, easiest-to-use scalability product. That’s why over 400 projects have chosen to launch with Arbitrum, including Reddit.”
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