Ethereum scaling startup Optimism has raised $150 million in its latest Series B funding round, with a total valuation of $1.65 billion.
Funds To Lower Gas Fees
On Thursday, Optimism announced the news of its Series B funding round, which was co-led by crypto investment firm Paradigm and venture capital firm Andreessen Horowitz (a16z). The funds raised in this round valued the startup at a whopping $1.65 billion. Previously, the startup had raised $25 million for its Series A funding in February 2021, and $3.5 million for its seed funding round back in January 2020.
The team has announced that the current funding will be used to optimize the network and lower gas fees even further. The Optimism network, which is a Layer 2 solution offers gas fees that are ten times cheaper than that on Layer 1. According to a blog post from the team, after gas fees were reduced by a cumulative 30% last year, the network was able to save users over $1 billion. The current project at hand is an Ethereum Improvement Proposal (EIP-4844) for Shard Blob Transactions, which could potentially reduce Ethereum network fees a hundred times in the near future.
Growing Demand Of L2 Solutions
The demand for L2 solutions like Optimism is growing proportionately with the increasing demand for Ethereum-based applications like NFTs, smart contracts, and DeFi. The rising popularity of these applications congests the network and drives up gas fees. This is where L2 solutions like the Optimistic rollup technology come in handy, by aggregating transactions outside of the Ethereum blockchain and providing benefits of reduced slippage, decreased transaction costs, and vastly improved transaction speeds.
Naturally, VC and crypto investment firms are flocking towards scaling solutions that will be the foundation of how Ethereum and its applications continue to grow and meet the needs of a rapidly expanding network. According to the L2Beat tracker, there is around $5.75 billion in total value locked (TVL) on L2 platforms, with Optimism alone approaching around $500 million.
CEO Wants Culture Of Transparency In Community
Unlike other popular L2 networks, Optimism is a Public Benefit Corporation with an open-source codebase that has already led to a number of popular forks. Optimism CEO Jinglan Wang spoke to TechCrunch about the open-source code and building a culture of transparency by rewarding ethical hackers who find vulnerabilities in the code.
“We’re very into building out in the open, every line of code we write is open source as we write it, and similarly we’re transparent about the vulnerabilities and bugs that are found and disclosed in our network. We want to build a good security culture around the Optimism community, where [ethical security hackers] know that if they find vulnerabilities, they will be compensated fairly.”
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