Ethereum (ETH) Layer 2 scaling solution Boba Network has scooped up $45 million in Series A funding from a host of big-name investors.
Paris Hilton, Crypto.com, Huobi, BitMart, and a Will Smith-backed VC firm are among the investors. The funding round gives Boba Network a $1.5 billion valuation.
Ethereum has been suffering from scalability issues since demand lept last year. There are nearly 3,000 decentralized applications (dApps) available on Ethereum with more than 50,000 daily users consuming a significant amount of the network’s energy.
The massive daily traffic leads to scalability issues such as high transaction fees and slow network operations. This is where Layer 2 solutions can help.
This is Boba Network’s first funding round. According to a Reuters report, founder Alan Chiu said that the funds will be used to “expand Web3 offerings and invest in projects built on its ecosystem.”
“This fundraising is about building a broad-based alliance to build the Boba ecosystem. Having so many amazing investors demonstrate their confidence in our vision and technology reinforces our belief that what we’re building is important and necessary. Hybrid Compute will scale Web3 development, enabling builders to deliver innovative products with greater functionality,” Chiu said.
Since the announcement, Boba Network’s native token BOBA gained 25% in the past 24 hours and is $1.90 at the time of writing.
Scalability issues addressed
Ethereum’s proof of work (POW) working mechanism is known for its massive energy use. Although POW is said to be more secure than proof of stake (POS), it needs extra computational power and runs into scalability issues.
These problems made room for the so-called Ethereum killers to join the competition. Solana (SOL), Avalanche (AVAX), Terra (LUNA) and Cardano (ADA) are a few to name. These blockchains were created with Ethereum’s scalability issues in mind.
Platforms like Boba Network operate on top of Ethereum to help is with “optimistically” confirming transactions with lower fees and faster transaction speed. This method can help the Layer 1 blockchain function with less stress.
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