Crypto Startup Solana Labs raises $314 million in DeFi push and challenge to Ethereum

Karthik Subramanian

Crypto startup Solana Labs has announced that it has raised $314 million to build decentralised finance (DeFi) and the Web3 ecosystem.

Want to rent out an extra room? Try blockchain!

The crypto token sale was led by Andressen Horowitz and Polychain Capital along with Alameda Research and 1 kx among others. It is believed that this investment would be used to encourage other startups to build on the Solana blockchain and also to have a fund that will invest into companies that build within the ecosystem, the company said.

This well and truly begins the competition between Solana and Ethereum to become the blockchain of choice for developers to build on. Though Ethereum is very well developed over the last few years and most of the apps and DeFi startups are building on Ethereum, its high fees and network congestion have been pointed out by its critics recently as something that kills innovation . Though the fees are expected to become lower when ETH 2.0 is fully launched and operational, it is understood that many developers and blockchain startups have already started looking at alternatives.

“We’ve been following Solana for a long time and believe it could massively scale the DeFi ecosystem,” said Olaf Carlson-Wee, Managing Partner at Polychain Capital. “In our view, Solana is a compliment to Ethereum, and we’re thrilled to see strong developer activity and a continually expanding community grow around the project.”

Investors and a growing community of developers believe that Solana could provide that alternative due to its lower fees and high transaction speed. The blockchain can process up to 50,000 transactions per second at this time and this is expected to improve as upgrades are made and as the ecosystem grows.

The fact that some major investors like Alameda Research (owners of the FTX exchange) are betting on Solana could ensure that it emerges as a serious contender for the development and the innovations that are currently happening on Ethereum. There are other alternatives to both these blockchains like the Flow blockchain but the market buzz hasn’t yet caught on for these blockchains as much as it has for Solana.

Already many DeFi teams have shown interest to build on Solana and the company has also been upgrading its blockchain to cater to this space. The DeFi space is expected to be the next frontier for development and innovation and there has been a lot of competition in this space to gain investor attention. It would be interesting to see how Solana develops in the coming years and whether it would continue to challenge Ethereum or whether it would lose steam in the long run.

 

Read this next

Digital Assets

Ripple and Lithuanian FINCI partner for XRP-based payments

Ripple is looking to expand its presence in Europe, forming a new partnership with Lithuanian electronic money institution FINCI.

Digital Assets

Crypto.com enables Shopify merchants to accept crypto payments

Crypto.com has integrated with Canadian e-commerce giant Shopify so global merchants can accept crypto payments and save on processing fees through cash-final settlements.

Institutional FX

FX volume drops 13pct at CLS Group in April 2022

FX settlement specialist CLS Group today reported that the executed volumes of currency trading on its platforms were notably down in April.

Crypto Insider, Opinion

Regulation: The Gold-Standard for Crypto-Assets

When the US supervisory authority SEC allowed an investment product referencing Bitcoin futures to be traded for the first time last October, this was widely perceived as a signal that cryptocurrencies had finally become established as an asset class.

Executive Moves

Solid hires FX industry veteran Darren Barker for multi-bank ECN’s business development

His curriculum vitae includes former roles at Cantor Fitzgerald, Sucden Financial, R.J. O’Brien, Jefferies, Natixis, Unicredit, J.P. Morgan, Raiffeisen, RBS International, UBS, Deutsche Bank, and Citi. 

Inside View

Mihails Safro, xpate CEO: Tips sellers need to know to overcome compliance obstacles

The unprecedented growth of e-commerce changed shopping dramatically last year. Many sellers suddenly faced a rapidly growing number of customers who had to stay home during the lockdown. When some clients adopted Netflix and Spotify as part of a daily routine, others ventured into online business. Robinhood alone saw a whopping 6 million rise in user numbers in 2 months. 

Institutional FX

BMLL delivers Level 3 data to Kepler Cheuvreux for order book analytics and algo performance

The solution covers more than 6.5 years of harmonised historical data from 65 venues and combines it with easy to use APIs and analytics libraries in a secure cloud environment. 

Digital Assets

Crypto Is An Invaluable Tool In The Fight Against Financial Oppression  

Crypto has proven itself to be much more than just a hot investment. Indeed, some say it’s poised to play a critical role in the future of finance

Executive Moves

Parameta appoints Head of Benchmark and Indices with a focus on ESG and rates

The firm said building out its benchmarks & indices offering will now be a core priority, with a particular focus on the ESG and rates space.

<