Paradigm leads $225M funding round for new ‘Solana killer’ L1

cyptouser2 months agoCryptocurrencies News47
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Crypto-focused venture capital (VC) firm Paradigm is leading a $225 million funding round into a new layer-1 blockchain network which is set to compete for market share with Solana and other top networks.

The funding round was completed by blockchain firm Monad Labs, which aims to build a new layer-1 smart contract network with faster speed and lower costs compared to Ethereum.

The funding round was announced after two years of development, according to Keone Hon, the founder of Monad Labs, who told Fortune in an interview:

“We’re emerging from roughly two years of development… At a time when a lot of the research community was focused on roll-up, data availability, and other directions of scaling, Monad basically went really deep on the pure execution side.”

The new L1 will be 100% compatible with the Ethereum Virtual Machine (EVM), capable of up to 10,000 transactions per second (TPS), according to a March 14 X post by Monad.

Despite being the home of decentralized finance (DeFi), Ethereum has significant shortcomings, including notoriously high gas fees during network congestion. Monad Labs aims to improve on its shortcomings with its execution-focused L1. Hon told Fortune:

“We realized there was a huge need for a more performant EVM, and that in spite of this need, no one was really working on this problem.”

Related: With 10 days to the halving, analysts predict $150K Bitcoin top

Crypto VC funding continues to rise

The new investment round was announced during a period of increased VC interest in crypto firms.

Bitcoin layer-2 network Mezo announced the completion of a $21 million Series A funding round led by Pantera on April 9. Mezo enables investors to earn yield based on the time they hold their tokens. They describe it as a “Bitcoin Economic Layer.”

On April 3, reports emerged of Paradigm negotiating to raise up to $850 million for a new fund, which would make it the largest raise in the crypto industry since May 2022, when Silicon Valley-based VC firm Andreessen Horowitz (a16z) raised a record-setting $4.5 billion.

Crypto VC funding turned positive in the first quarter of 2024, breaking a two-year slump, with the funds invested rising 38% compared to the previous quarter, according to data analysis platform Crypto Koryo.

Related: Frax Finance dives into DeFi liquidity with $250M USDe allocation

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