Scroll, an Ethereum Layer 2 network that utilizes zk-rollups technology, has raised $50 million in its most recent funding round bringing its valuation to $1.8 billion.
An update: To accelerate plans for developing our zkEVM, pursue cutting-edge research, and continue building with a broader community, we've raised capital from a global set of participants.
— Scroll 📜 (@Scroll_ZKP) March 6, 2023
The round comes at a time when funding to the entire sector has cooled off after a difficult 2022 when many companies went bankrupt, including the crypto exchange, FTX.
Nonetheless, Scroll’s round saw a host of notable firms signaling that some of the biggest investors retain interest in the sector.
The round saw the following participants:
- Polychain Capital
- Sequoia China
- Bain Capital Crypto
- Moore Capital Management
- Variant Fund
- Newman Capital
- IOSG Ventures
- Qiming Venture Partners
Founded in 2021, Scroll aims to scale Ethereum to a billion users by utilizing a Layer 2 network that processes transactions off Ethereum on its own network. The transaction data is then sent back to Ethereum which helps increase transaction speed and reduce costs.
To achieve scalability, Scroll’s network uses ZK-rollup technology, specifically its zkEVM (zero-knowledge Ethereum virtual machine). This technology allows Scroll to batch transactions and generate proof that verifies their legitimacy. Once the proof is created, it is broadcast to Ethereum for approval enabling the transactions to be processed more efficiently.
Last week, Scroll launched its zkEVM on the Goerli testnet as it transitioned out of its pre-alpha testnet phase.
The traction on the pre-alpha testnet was impressive, with Scroll Co-Founder, Sandy Peng, noting in an interview that it had achieved one million unique addresses and 16 million transactions. The mainnet launch is expected to take place in the next three to four months, according to Peng.
Along with Scroll, several other Ethereum scaling networks use ZK-rollups, such as Polygon, StarkWare, and Matter Labs. According to Peng, who is just one of Scroll’s co-founders, the network’s competitive advantage lies in its three core design principles: community-driven, security-first, and decentralization at every level.
With the $50 million raised in the latest funding round, Scroll plans to use the capital to continue building its product, launch its mainnet, and expand its ecosystem. The company plans to increase its team size from around 60 to nearly 100 in the near future.