Ex-Meta employees raise $200M from a16z, Tiger, Multicoin to make Facebook’s crypto dreams come true – TechCrunch
Facebook’s bold attempt to create a crypto-payments network ended unceremoniously earlier this year when Silvergate Capital acquired Diem’s technology assets for $182 million. The deal showed how Facebook, now Meta, finds itself with few avenues blessed by regulators to become a central player in the blockchain ecosystem, an achievement that has also cost the company many talents, including the crypto boss David Marcus.
Some former Meta employees are beginning to take up the torch of open-source blockchain Diem in an effort to realize the vision of a decentralized network that they believe is built to serve billions of users and is designed to meet the needs of big companies right from the start. . One such effort, called Aptos — spearheaded by former Meta employees who only left the company in December — has already secured unicorn funding from Andreessen Horowitz and many other big web3 investors.
“We are the original creators, researchers, designers, and builders of Diem, the blockchain that was originally designed to serve this purpose. Although the world never got to see what we built, our work is far from done,” wrote Mo Shaikh, CEO of Aptos, in a blog post last month.
The startup tells TechCrunch it has closed a “strategic” $200 million investment led by a16z with participation from Tiger Global, Katie Haun, Multicoin Capital, 3 Arrows Capital, FTX Ventures, and Coinbase Ventures among others. Silvergate Capital is another notable investor in the first round, although the Aptos team swears that it will not license or use any of the IP Diem that Silvergate owns when building its blockchain.
The founders didn’t disclose the valuation, but said they were “well settled in unicorn territory.” (The round’s stock valuation is $1 billion, according to an investor note obtained by TechCrunch, but after taking tokens into account, it’s considerably more than that. The Aptos team declined to share exact numbers.)
The Aptos blockchain will be a so-called layer 1 system, which means that it will not be designed to sit on top of existing blockchains like Ethereum or Solana and will instead build its own decentralized network. Along with the company’s funding news, Aptos also announced that it has officially launched its “devnet” which will allow developers to experiment and build on the Aptos blockchain ahead of a public release, which the team hopes to arrive during the third trimester.
The Aptos team said a number of companies, including Anchorage, Binance, Coinbase, Livepeer and Streaming Fast, are already engaging with the startup, providing feedback and contributing code to devnet.
Aptos aims to build a more scalable blockchain with faster transactions and lower fees than current traditional networks allow. The hope of the founders is to be able to design a more reliable and predictable network for large customers interested in adopting blockchain.
There are only a limited number of ways to scale blockchains. Proponents of Ethereum and its scaling solutions, for example, are betting on using rollups and sharding — techniques that split blockchains into smaller chunks and then reconnect them — for scaling. ladder.
But some other players believe there is a better approach to this challenge.
“Current blockchains are just not as reliable as existing financial rails, we’ve seen issues with downtime and outages that last for hours,” said Avery Ching, CTO of Aptos, in an interview with TechCrunch.
Kyle Samani, managing partner of Multicoin Capital, a venture capital firm known for being an early backer of several blockchains including Solana, says the aforementioned approach increases latency, technical complexity for developers, makes cross-chain applications “inherently fragile” and breaks composability.
“The crypto industry frames this debate in a relatively binary way. But there are nuances. These approaches are not mutually exclusive. While most industry players have traditionally argued for decomposing state into multiple pieces, we have argued for single-fragment performance optimization to optimize UX, DX, and maximize performance. design space for composable crypto applications. This belief led us to triple on Solana through 2019 and 2020, and hold on to a meteoric rise in 2021,” he wrote in a blog post.
While Diem believers like Andreessen Horowitz may rally around a team trying to take up the torch of what Facebook was trying to build with Diem and Libra, others in the crypto world are more skeptical of the achievement. of a vision of web3 originally conceived by Facebook.
“To be clear, we have no formal relationship with Facebook and no investment from them,” Shaikh told TechCrunch in an interview.
“We are certainly excited about a common vision of the Web3 world. A good thing about us being external is that we can focus on everyone now, we don’t have to focus only on Meta. Our goal is to work with some of the biggest brands and technology companies in the world to truly build a web3 ecosystem for the masses.
Another challenge/opportunity awaiting Aptos is how quickly it is able to attract developers. The company hopes to gain developers in part through the use of Move, an open-source programming language developed by Meta. “Move is designed for safe resource management, it’s deterministic and measured,” Ching said, noting that the language is suitable for strict auditing and verification processes.
“Secondly, our team developed the Byzantine Fault Tolerance protocol with the lowest latency and optimistic response that we have performed extensive testing and auditing on for many years. We’re actually on the fourth iteration of this protocol and we’ve been pushing protocol upgrades,” he said, saying that in testing private networks over the years, the protocol has had no break time.
In a statement to TechCrunch, Samani of Multicoin Capital added, “The Move programming language has been thoroughly battle-tested and provides an ideal environment for creating secure, production-grade contracts capable of serving billions of people. We expect Aptos to be up and running and immediately become a viable contender in the battle for Layer 1.”
To make things more attractive for developers, Aptos is considering different avenues for their Ethereum and Solidity support on their network.
“I have a very close relationship with the Ethereum community. It’s clear that it’s a multi-chain world: people have built bridges, solutions that solve scalability or are able to transition from ‘one level to another in the pursuit of larger markets,’ said Shaikh, who previously led strategic partnerships for the Meta Novi portfolio.
“We want to be part of this ecosystem. We are not necessarily here to compete. We want to complete and these challenges – whether it’s something like the wormhole event that took place – are a clear indication that things need to be responsibly built from the ground up,” Shaikh added.
“The feedback we’ve heard from Solidity and Ethereum developers is that they run into limitations, they run into challenges where you have to spend hours auditing your smart contracts. The capacity of smart contract auditors is limited today. These things keep becoming pain points. They are looking for other L1s to natively rely on rather than just porting assets or bridging, as this often compromises security. »