Venture capital firm Paradigm, with a focus on cryptocurrency, is taking the lead in a funding round worth $225 million for a new layer-1 blockchain network. This network aims to compete with top networks like Solana and offers faster transaction speeds and lower costs compared to Ethereum.
Monad Labs, the recipient of the funding, plans to build a new layer-1 smart contract network that addresses the limitations of Ethereum. After two years of development, Keone Hon, the founder of Monad Labs, revealed in an interview with Fortune that the new network will be fully compatible with the Ethereum Virtual Machine (EVM) and can handle up to 10,000 transactions per second (TPS), as stated in a post by Monad on March 14.
Although Ethereum is known as the hub for decentralized finance (DeFi), it suffers from issues such as high gas fees during network congestion. Monad Labs aims to overcome these shortcomings with its execution-focused layer-1 network. Hon explained to Fortune the goal of improving on Ethereum’s flaws.
In the midst of growing interest from venture capitalists in cryptocurrency firms, the funding round was announced. On April 9, Bitcoin layer-2 network Mezo completed a $21 million Series A funding round, led by Pantera Capital. Mezo offers investors the opportunity to earn yield based on the duration they hold their tokens, describing itself as a “Bitcoin Economic Layer.”
Furthermore, reports emerged on April 3 about Paradigm’s negotiations to raise up to $850 million for a new fund. If successful, this would be the largest fundraising in the crypto industry since May 2022 when Andreessen Horowitz, a VC firm based in Silicon Valley, raised a record-breaking $4.5 billion.
According to data analysis platform Crypto Koryo, crypto venture capital funding experienced a positive turnaround in the first quarter of 2024, breaking a two-year slump. The funds invested increased by 38% compared to the previous quarter.
To add to this trend, Frax Finance recently allocated $250 million to DeFi liquidity with its USDe token.