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

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

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.

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.

Matter Labs team image via Twitter