Our Investment in Matter Labs: Building Highways for DeFi
We are excited to announce our investment in Matter Labs to bring scalability to decentralized finance with Zero-Knowledge Proofs alongside Placeholder, Dekrypt Capital, 1kx, and Dragonfly Capital Partners. We believe the on-chain data availability and privacy scaling computation the Matter Labs team is building will be the integral piece in accelerating the growth of the decentralized finance stack.
At Hashed, we seek founders who have the ability to build breakthrough technology that enables novel ways of engaging with the underlying infrastructure and power to attract strong mindshares in the community to grow together. In the nascent stage of the decentralized finance ecosystem, Matter Labs has emerged as a leader in both.
As the first smart contract platform, Ethereum has unlocked unbounded possibilities for experiments by developers to program their imaginations in a censorship-resistant, permissionless, and trust-minimizing architecture. It is natural that the decentralized finance ecosystem has formed on the platform with the biggest aggregate economy and developer activity, acting as a unique moat against the next generation protocols. However, contrary to the proposed capability, practical use cases have been confined due to gas costs, latency, throughput, and tech support limitations. This means that today, developers building on Ethereum are shuttling traffic on local roads.
As a previous software engineer, this is something that I experience frequently first-hand. When I met Alex Gluchowski at the ETHDenver hackathon, he guided me through research and development efforts his team is taking around solving the exact problems above.
Matter Labs’ development efforts leverage ZK Rollup, which solves the “blockchain trilemma,” enabling an architecture that is secure, scalable and censorship-resistant. Ethereum Co-Founder Vitalik Buterin has called his favorite Layer-2 scaling solution, and the team was later awarded a grant to continue this work by the Ethereum Foundation.
Zero-Knowledge Proofs (ZKP) has seen dramatic progress in the last couple of years. It’s a family of ingenious mathematical techniques, which, among other properties, provide proofs of computational integrity in a succinct and easily verifiable way. Being aware that the circuit-specific trusted setup remains a serious barrier for the adoption of SNARK-based scaling, Matter Labs team has been at the cutting edge of the cryptographic research and built the first product around the new Sonic SNARK construct. Sonic is a game-changer, as it is the first-ever cryptographic protocol with constant O(1) verification complexity and universal updatable trusted setup.
Since the hackathon, Alex and the team have continued to impress us with their technical execution power through multiple iterations in bridging the gap between cutting-edge academic research on Zero-Knowledge Proofs and their applications in usable products. A highly scalable payments system emphasizing security and usability is planned as their first such product. A prototype of Matter Labs’ payment platform, designed to offer decentralization with high throughput, low transaction cost, and high usability, is live on the Ethereum mainnet.
Matter Labs is not alone in this pioneering journey. The team is working with the industry-leading projects and thought leaders in decentralized finance and cryptography — already guiding many of our portfolios in utilizing Matter Labs’ approach.
We are thrilled to partner with Matter Labs on their journey in building the first highways for the decentralized finance for the benefit of all.
