Yesterday, San Francisco blockchain startup Solana Labs announced that it raised $314 million in funding to build a decentralized finance (DeFi) and Web3 ecosystem for its public blockchain.
Andreessen Horowitz and Polychain Capital led the private token sale, with participation from 1kx, Alameda Research, and others.
Some of the investment will go towards launching an incubation studio and a venture investing arm specifically for the Solana ecosystem. The studio will focus predominantly on platform building and developing decentralized applications.
Within the DeFi industry, Solana poses stiff competition to other leading public blockchains such as Ethereum. Solana’s scalability, lower fees and faster processing times mean that it has a shot at chipping away at Ethereum’s dominance for business applications. Currently, Solana can process more than 50,000 transactions per second.
“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.”
Solana is not the only blockchain to potentially attract usage away from Ethereum. Flow Blockchain, which Dapper Labs founded in 2018, has built a high performance, low cost blockchain aimed at targeting non-fungible tokens (NFTs) and the entertainment sector. Recently, Dapper Labs raised $305 million at a $2.6 billion valuation.
Last year saw the launch of Serum, a high-speed, non-custodial decentralized exchange (DEX), which was also built on Solana by FTX and Alamada Research.
With the high costs and delays brought about for DeFi this year, Solana’s competitive technology is one to watch for those interested in the DeFi space.