The Solana blockchain, which some have dubbed a potential Ethereum replacement, has raised a large amount of money to become an ideal venue for decentralized applications, or dapps.
According to several sources interviewed by Decrypt, some of whom spoke on condition of anonymity, Solana is raising between $300 million and $450 million. Decrypt was unable to get a precise number, but learned that the company intended to close a smaller round in March, but later expanded the scope of fundraising in response to high demand.
“I am excited and impressed to see Solana’s recent business growth. They’ve had industry-leading technology for some time and it’s gratifying to see reality approaching,” said Sam Bankman-Fried, a prominent crypto marketer, whose FTX company launched a decentralized version of its stock exchange in Solana last year.
Solana declined to comment on the fundraising news, but in a recent interview, his executives did not deny the information obtained by Decrypt.
As for the idea of an Ethereum replacement, this label has also been applied to other blockchains and is almost certainly over the top. Ethereum remains by far the most popular blockchain for third-party projects – and Solana herself downplayed that.
However, Solana appears to be poised to be a challenging Ethereum leader in the rapidly evolving world of decentralized applications, which revolve primarily around finance but are also moving into gaming and media.
Solana’s main appeal, according to its enthusiasts, is that it’s faster and less expensive than Ethereum. The bill claims its maximum throughput is over 50,000 transactions per second. Ethereum averages between 10 and 15 transactions per second.
Meanwhile, Solana’s design as a proof-of-participation blockchain means transactions cost pennies, which is a stark contrast to Ethereum, where rising fees sometimes force users to pay hundreds of dollars to process transactions. (Ethereum fees are expected to drop significantly, however, as the blockchain likewise transitions to a proof of participation model).
Founded in 2017, Solana is also active in building tools and networks for others to build on the platform. This includes support for a new protocol called Metaplex, which launched this week and is being touted as a “Shopify for NFTs” – allowing creators like the Grammy Award-winning musician RAC to create their own stores to sell exclusive digital items.
Solana has also seen its native token, SOL, take off this year, jumping from about $2 in early January to a high of $54 in May. It is currently trading around US$37.
Prior to the current fundraising round, Solana had raised $21.8 million, according to Crunchbase. This included a $20 million Series A led by Multicoin Capital in 2019, which was also supported by BlackTower Capital and others. Multicoin’s CEO declined to comment on the current round, while BlockTower did not immediately respond to a request for comment.