Blockchain Capital and Dragonfly Capital co-led the Series C funding round, with participation from Variant, a16z and Lightspeed Venture Partners. This additional funding brings the company’s total raised to date to $458 million.
The company also announced it’s open-sourcing its project under the MIT Open Source license, which will open the technology to other developers to take it and build on the ecosystem as they see fit.
The zkSync offering is a type of “zero proof” scaling solution for Ethereum which assists with one of the biggest problems with blockchain technology which is transaction fees. Every time a transaction happens on Ethereum, it costs extra to send it across the network. The fees can be higher or lower depending on the amount of congestion on the network.
The problem is that the fees remain the same no matter the amount of currency being sent across the network and congestion on Ethereum has been extremely high over the past few years. Some events have experienced spikes that have transaction fees jump so high that relatively small transactions would be overwhelmed by fees.
To help fix this, so-called Layer 2 solutions, such as zkSync, have developed methods that allow transactions to be offloaded from the main Ethereum network, which is described as Layer 1, so transaction fees can be lowered. It does this by having transactions handled on the Layer 2 solution, executing them, and then pushing them back onto Ethereum, where they are finalized, which allows them to scale.
The big benefit of zkSync is that its solution will work with any blockchain that uses the Ethereum Virtual Machine. This EVM compatibility means that zkSync will function on networks such as Polygon, Avalanche, Solana and Binance Smart Chain.
Over 150 ecosystem projects already use zkSync including giant decentralized apps and exchanges such as Chainlink, SushiSwap, Uniswap, Aave, Gnosis and Curve.
As part of today’s announcement, Matter Labs said that it is dedicated to open-sourcing zkSync 2.0 and that this is the next milestone in the development of zkSync. It will be releasing the code under the MIT Open Source license by the end of 2022.
Matter Labs said that it will use the new funding to launch its own projects built on zkSync, provide funding for projects built by other teams, launch Matter University to provide education for its ecosystem and continue to hire more people.