Blockchain firm Solana raised over $314m through a private sale of its native token SOL led by Andreessen Horowitz and Polychain Capital.
The sale, where Solana sold $314,159,265 worth of SOL rather than the traditional purchase of equity shares, also had other participating investors including Alameda Research, Blockchange Ventures, CMS Holdings, Coinfund, CoinShares, Collab Currency, Memetic Capital, Multicoin Capital, ParaFi Capital, Sino Global Capital and Jump Trading.
The newly raised funds will be used to support the Solana ecosystem. Solana plans to launch an incubator that will promote and fund the development of upcoming decentralised applications (dApps), DeFi platforms and Web3 projects. It will also create a venture capital arm and trading desk.
Solana Labs co-founder and CEO Anatoly Yakovenko said that blockchains are at “an inflection point akin to the moment that PC’s became widely accessible in the 1970’s” and that “the next phase is onboarding 1 billion users.”
Like Ethereum, Solana uses smart contracts but it processes transactions at a much higher speed and lower cost. It uses a consensus mechanism called Proof of History. What makes it distinct from Ethereum is that Ethereum’s current capacity is about 15 transactions per second. Solana’s capacity, on the other hand, is around 50,000 transactions per second. As for cost, Ethereum’s average fee per transaction is about $6, while Solana’s is around $0.00001.
Ali Yahya of Andreessen Horowitz noted that Solana’s high-performance design means that the blockchain can run “at the speed of Nasdaq matching engines” and support many types of apps.
Yahya added, “It is easy to imagine countless use cases for crypto as a technology, but building them into real products that millions of people use requires the existence of high-performance blockchains.”
Meanwhile, Polychain Capital’s Olaf Carlson-Wee remarked on the project’s “continually growing community,” adding that he sees Solana as a complement to Ethereum.
Solana launched its main net beta in March 2020 and continued to grow since. Today, the ecosystem encompasses decentralized exchanges like Serum and Raydium, stablecoins like USDC and USDT, and the recently launched NFT marketplace Metaplex.
The project has received support from key crypto figures like the CEO of Alameda Research Sam Bankman-Fried. In addition to this round, the firm has backed a variety of Solana-built projects. The ecosystem has also attracted millions of dollars in capital from exchanges and other firms.
The blockchain’s market cap is roughly $11.7bn. SOL is trading at $43 – at the time of writing – up 38.8% in the last week.
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