13.01.2021

Startup Bringing Zero-Knowledge Proofs to Ethereum Raises $2 Million

On Monday, blockchain research and development startup Matter Labs announced a $2 million seed round led by Placeholder VC to develop a new scaling initiative atop the ethereum blockchain.

The number of initiatives dedicated to scaling the ethereum blockchain is manifold. Ethereum 2.0, Plasma, Raiden, zk-SNARKs – the list goes on.

Speaking to the goals of the initiative, Matter Labs co-founder Alex Gluchowski said:

“Our product will be much more scalable [than ethereum today] without sacrificing decentralization or security. … You will be able to deposit any funds on it and it will be as safe as depositing on ethereum itself.”

Matter Labs’ technology is based on a novel form of cryptography known as zero-knowledge proofs (ZKPs). Leveraging this “mathematical magic,” in the words of Gluchowski, transactions on ethereum could be significantly sped up and cheaper to deploy.

“With what we’re building … payments [on ethereum] will be very cheap and have very high throughput,” said Gluchowski. “Not only very cheap but predictively cheap because the bulk of the cost will be coming from [ZKP] computation.”

At the same time, Gluchowski told CoinDesk the research into leveraging ZKPs as a scaling solution on ethereum is still “very early.” At present, Matter Labs has built a prototype of its scalable payments platform and is working towards creating a new minimum viable product over the coming months.

Investor buy-in

A number of other venture capital firms joined Placeholder in the funding round, including 1kx, Dekrypt, Hashed and Dragonfly Capital Partners.

Hashed CEO and managing partner Simon Seojoon Kim told CoinDesk:

“We believe the on-chain data availability and … scaling solution the Matter Labs team is building will be the integral piece in accelerating the growth of [ethereum’s decentralized finance] space.”

Dekrypt co-founder Howard Wu also added that using ZKPs to wrap “hundreds of thousands of transactions” on ethereum into succinct, verifiable proofs is a “really cool way to try and bring scalability to ethereum.”

Launched officially in December 2018, Matter Labs has also received funding from the Ethereum Foundation, the oldest non-profit dedicated to ethereum protocol development.

Gluchowski said Matter Labs has “received over $100,000 in several different grants” from the Ethereum Foundation over the course of 2019.

Seychelles’ Stock Exchange Will List Ethereum Tokens Representing Supercars

Hankering for a Ferrari? Well, the only licensed stock exchange in Seychelles, an island nation in the Indian Ocean, is listing tokenized collectible cars worth over $200 million for retail and institutional investors.

MERJ said Friday it is partnering with CurioInvest, a tokenization platform building on ethereum, to create tokens representing shares in “supercars” like the Ferrari.  While the sale is open to institutional and retail investors, purchases are expected to be driven by institutional investors and those from regions with restrictions on auto imports, such as China.

A $1.1 million Ferrari F12tdf will be the first car listed on the exchange, and MERJ said it might list as many as 500 vehicles.

MERJ claims to be one of the first compliant national exchanges to list its own tokenized equity on the ethereum blockchain. It said investors will have direct access to the exchange through a computer or mobile app. Its institutional clients can gain access via traditional broker channels.

The exchange said the listings will enable more people to invest in rare and luxury cars, which has been an asset class otherwise inaccessible to the vast majority of investors.

 “With the partnership, we are creating an access point for these investors that is compliant through the full cycle of exchange, clearing, settlement and registry,” Jim Needham, head of digital strategy at MERJ Exchange, said in a statement.

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