Solana will use these funds to expand its blockchain ecosystem. It plans to have its own venture capital arm besides having its dedicated trading desk.
On Wednesday, June 9, Solana blockchain developer Solana Labs announced a $314 million fundraise in the private token sale. Solana said that it will use this fundraise to build a decentralized finance (DeFi) ecosystem atop the Solana blockchain network.
Giants like Polychain Capital and Andreessen Horowitz led the private token sale and participation from players like Coinfund, CMS Holdings, ParaFi, and others. Venture firm Alameda Research was also one of the major backers of the project. The firm also backed Project Serum, one of the most popular decentralized exchanges on the Solana blockchain network.
Solana is a Proof-of-Stake (PoS) blockchain that aims to address key issues of speed and scalability. Emerging as an Ethereum-competitor, Solana has become one of the largest platforms for decentralized projects and applications (DApps). Besides, its lower fees and faster processing times have made it the natural choice for many market players.
Just for comparison, the Ethereum network can process 15 transactions every second whereas Solana 50,000 transactions per second. Similarly, Ethereum’s average transaction fee is around $6 while for Solana it is around $0.00001. Anatoly Yakovenko, co-founder and CEO of Solana Labs said:
“We are convinced that scalability and throughput in blockchain are now a solved problem. The next phase is onboarding a billion users. That’s the whole purpose of the space: it’s empowering everybody with cryptography so there’s no middleman anymore, it’s just a super-connected network”.
Solana to Use Money Received as Fundraise for Further Expansion
With the latest fundraise, Solana Labs is planning to launch an incubation studio along with its own venture investing arm. Besides, it also plans to have a trading desk that’s dedicated to the Solana ecosystem. With the goal of attracting more users to its ecosystem, Solana will continue supporting the development of DApps on its platform.
The number of Projects on Solana has also been increasing sharply. There are over 90 projects currently hosted on the Solana ecosystem with some of the most notable being Serum, Raydium, and Pyth network. However, in terms of the DeFi game, Solana is quite behind Ethereum as of now. The total value locked (TVL) of Ethereum DeFi projects is $59 billion while that of Solana is less than $1 billion.
Polychain Capital’s managing partner Olaf Carlson-Wee is confident that Solana can “massively scale” the DeFi ecosystem. “In our view, Solana is a compliment to Ethereum,” he said. “We’re thrilled to see strong developer activity and a continually expanding community grow around the project.”