bloXroute raises $10M to date to solve the blockchain scalability bottleneck
By: Eleni Steinman, Strategy & Operations
We are excited to announce the closing of our Simple Agreement for Future Tokens (SAFT) with participation from Pantera, Coinbase Ventures, Fenbushi, and others. bloXroute was founded by blockchain and networking experts at Cornell and Northwestern University with one goal in mind — to solve the scalability bottleneck for all blockchains. This round will provide the necessary support to achieve this goal. Including seed investments, bloXroute has raised over $10M to date.
Why is this important problem worth solving?
Each year 144 billion non-cash payments are made by debt, credit, checks or ACH. Visa alone processes on average 2,000 transactions per second (TPS). Conversely, Bitcoin currently average 3–5 TPS and Ethereum 15 TPS. A major roadblock to widespread adoption of blockchains is this scalability problem — blockchain’s throughput, measured in tps, is nowhere near the level it needs to be to match the traditional payment system.
And payments are just the tip of the iceberg. Blockchain technology will open the door to an immeasurable amount of other non-payment transactions such as DApps and smart contracts, in addition to enabling micropayments. For blockchains to succeed, this scalability problem must be solved.
Why is this problem so hard to solve?
Blockchains have trouble scaling because the trustless peer-to-peer network (P2P) model they employ to propagate transactions and blocks breaks when you try to increase the throughput. This is because increasing the block size or reducing the inter-block time interval — the two ways to increase the number of tps — increases the probability of a fork and too many forks causes the blockchain to unravel or break. This is why no blockchain can scale significantly based on the existing P2P propagation model.
All solutions require solving the network bottleneck
There have been notable advances in tackling this problem, namely on layer 1 (blockchain layer) or layer 2 (off-chain layer). However, without resolving the bottleneck at the layer-0 (networking layer), these solutions can never be fully realized.
At layer 1, advancements have been made with new blockchains that have allowed for some scale, such as Avalanche or Thundercore. But, as with all P2P networks, regardless of your consensus mechanism (e.g. PoS or PoW), information must be transmitted throughout the network at layer-0. Only by removing the bottleneck at this layer can blockchains fully scale.
Similarly, layer 2, or off-chain solutions, allow for some scale but typically compromise trust in favor of scalability and require, at some point, for transactions to be written to the blockchain. Solutions such as the Lightning network (LN) require you to watch the mempool/blockchain or trust Intel SGX like with TeeChan. Meanwhile, wide adoption of LN would increase the transaction demand on layer-1 and require more data to be sent across the networking layer — triggering the scalability bottleneck.
Just as content distribution networks unlocked the power of the web, bloXroute is poised to remove the scalability bottleneck and unleash the power of blockchain. [We further this topic in our Medium post]
A novel solution: bloXroute
bloXroute is the only layer-0 solution that is able to solve the scalability problem in a provably neutral (i.e. without the ability to control which blocks get added or rejected) way that requires no protocol changes or compromises to security or decentralization.
bloXroute does this by propagating blocks on behalf of the peer networks’ nodes by utilizing a Blockchain Distribution Network (BDN). This solution is trustless because bloXroute is incapable of discriminating against individual nodes, blocks, and transactions whereby trust is placed in the entire network instead. Additionally, bloXroute is constantly audited by the nodes it serves.
bloXroute is protocol-agnostic, providing its scaling services to numerous cryptocurrencies and blockchains simultaneously.
bloXroute is the only solution that does this.
We have already built the system and are now working on Version 1, scheduled for deployment in Q2 2019.
We are a team of computer scientists, engineers and passionate entrepreneurs. If you want to join us on our mission to scale all blockchains, please check out our available positions to work with the bloXroute team in our Chicago offices.