Announcing our investment in Thala Labs’ seed round

Thala is building a decentralised stablecoin that can power the next generation of scalable blockchains, building the Move-native stablecoin and liquidity layer.

By Sep Alavi, Managing Partner, Florent Jouanneau, Principal, and Marthe Naudts, Analyst

Aptos and Sui are two multi-billion dollar Layer 1s that entered the crypto scene this year, building excitement for the scalable future of blockchain technology. They use a new smart contract coding language: Move. A language developed at Meta when they entered into the peer-to-peer payments foray and wanted to build a permissioned blockchain-based stablecoin payment system, which they named Diem.

It promises a number of benefits over other languages, such as Solidity, primarily in security and composability. Many of the original team members left Meta and took the promise of the new Move language with them.

Both Aptos and Sui are Layer 1s cracking the scalability issues that plague other L1s. They both use proof of stake as their consensus mechanism, but apply different versions of Move and algorithmic designs behind their parallel execution — which means their consensus algorithms differ.

Aptos’ testnets were able to process over 160k transactions per second and >1s time to finality, while Sui claims almost instant settlement of most transactions with up to 120k transactions per second each.

Compare that to Ethereum’s maximum of 45 TPS and Solana’s 2.3–46s TTF, and it’s easy to see what the excitement’s all about. They’ve raised about $600m between them and have built up over 500k active community members combined.

Our investment

Our team did extensive research on the new language, of which you can find some of the details published here. This, combined with previous work looking into the problems of algorithmic stablecoins (see here), led us to develop a strong thesis around the ecosystem and the need for it to have its own native decentralized, overcollateralized stablecoin.

Enter, Thala.

Thala is building the first Move-native stablecoin, Move Dollar (MOD) — a fully-collateralised, yield-bearing stablecoin backed by a basket of on-chain assets. Through its monetary policy, collateral mobilization, and associated automated market maker providing liquidity, Thala solves the decentralized stablecoin trilemma of peg stability, security and capital efficiency.

The team at Thala is extremely talented, with experience ranging from crypto-native and traditional tech backgrounds, including work at ParaFi Capital, NEAR, MakerDAO, Twitter, Apple, Amazon, and Google.

We are thrilled to announce our investment in Thala’s $6m Seed round, alongside Shima Capital, ParaFi and other phenomenal investors. We have seen how much thought and energy Adam, San and the entire founding team have put into the product and launch, and we’re excited to keep working with them.

Follow Thala’s Twitter, join their discord, and check out their website for updates!