Paradigm, a venture capital firm focused on cryptocurrency, is taking the lead in a funding round worth $225 million for a new layer-1 blockchain network. This network aims to compete with popular networks like Solana and address the shortcomings of Ethereum by offering faster speed and lower costs for smart contracts. Monad Labs, the company behind the new network, has been working on its development for two years.
According to Keone Hon, the founder of Monad Labs, the new layer-1 network will be fully compatible with the Ethereum Virtual Machine (EVM) and capable of processing up to 10,000 transactions per second (TPS). This information was shared in a post by Monad on March 14.
Ethereum, despite being a hub for decentralized finance (DeFi), has faced challenges such as high gas fees during network congestion. Monad Labs aims to address these issues with its execution-focused layer-1 network. Hon stated in an interview with Fortune that they aim to improve on Ethereum’s shortcomings.
The announcement of the funding round comes at a time when venture capital interest in cryptocurrency firms is on the rise. Mezo, a layer-2 network for Bitcoin, recently completed a $21 million Series A funding round led by Pantera Capital. Mezo offers investors the opportunity to earn yield based on the duration they hold their tokens, positioning itself as a “Bitcoin Economic Layer.”
Paradigm itself has been in talks to raise up to $850 million for a new fund, which would be the largest raise in the crypto industry since May 2022 when Andreessen Horowitz raised $4.5 billion. The first quarter of 2024 has seen a positive trend in cryptocurrency venture capital funding, with investments increasing by 38% compared to the previous quarter, according to data analysis platform Crypto Koryo.
In other news, Frax Finance has allocated $250 million to DeFi liquidity through its USDe token.