Ethereum (ETH) scaling startup, Optimism said Thursday that it had secured $150 million in a Series B funding.
Heavyweight venture capital firm Andreessen Horowitz and crypto VC firm Paradigm co-led the financing round, valuing the blockchain platform at $1.65 billion.
According to a blog post from the startup, the fresh round of capital will be directed towards expanding its team.
Optimism Addressing Ethereum’s Scalability Issues
Ethereum has long been a very popular choice with its smart contracts, DeFi and NFT applications. But the network’s dramatic increase in developer and user demand has resulted in equally dramatic gas fees, prompting sustainability and affordability concerns to the network’s users.
By implementing the optimistic rollup protocol, the Layer 2 (L2) solution startup by aggregating transactions outside of the Ethereum blockchain, reduces costs and latency issues while also providing the network with high scalability and even higher throughput capabilities when compared to Ethereum’s L1 alone. Optimism’s layer twos are also designed to execute without compromising the security features of the underlying blockchain.
After the recent fundraise, Optimism CEO Jinglan Wang stated:
We made a commitment to the public that we would not take profit from operating centralized parts of the system, so we wanted to remove the financial incentive for ourselves to remain centralized. [via cryptopotato]
After confirming Andreessen Horowitz’s investment in Optimism, the firm’s general partner Chris Dixon said that solving Ethereum’s scalability issues is a crucial near-term challenge. Dixon also said that scaling the network — which is obviously a big challenge due to the platform’s inherent properties of mining — will “dramatically expand the design space for Web3 applications.”
The startup’s blog post also revealed that the Optimism mainnet has been live for over a year and in that time, during which thousands of contracts and projects were deployed, including three forks going live, the open-source code has seen users save over $1 billion in gas.
According to data tracker L2Beat, the total value locked (TVL) on L2 platforms has grown to $5.76 billion, with Optimism currently ranked fourth amongst L2 solutions with TVL of around $440 million on its platform.
At last check, ETH was changing hands at around $2,930, up 4.35% on the day.