Mysten Labs Closes A $300 Million Fundraising Round With The Help Of FTX Ventures

The firm is valued at over $2 billion thanks to Mysten’s Series B investment, which grants investors stock and token warrants.

A quintuplet of former Meta executives created the firm, which is the brains behind the much-anticipated Sui blockchain, which has not yet gone live.

According to a Thursday release, Mysten Labs has completed a $300 million capital round at over $2 billion. 

Sui, a proof-of-stake Layer 1 blockchain that has not yet been launched and is intended to compete with Solana and Ethereum, was developed by Mysten. Evan Cheng, co-founder and CEO of the firm, said in an interview with The Block that Mysten intends to “bring about consumer acceptance—mass adoption.” Evan Cheng formerly served as director of research and development at Meta’s cryptocurrency wallet Novi Financial until September of last year. He said we put a lot of effort into developing a whole new architecture that enables us to expand the blockchain’s capacity horizontally.

The investment arm of Sam Bankman-cryptocurrency Fried’s exchange, FTX Ventures, led the $300 million Series B financing for Mysten. Other investors in the round include Jump Crypto, Apollo, Binance Labs, Franklin Templeton, Coinbase Ventures, Circle Ventures, Lightspeed Venture Partners, Sino Global, Dentsu Ventures, Greenoaks Capital, O’Leary Ventures, and others. In December of last year, Andreessen Horowitz’s a16z Crypto unit invested $36 million in Mysten. The Information initially mentioned the fund-raiser in July. 

All five of Mysten’s founders worked on the crypto projects at Meta. Chief Technology Officer Sam Blackshear is recognized for developing Move, the scripting language used by both Sui and Meta’s disastrous blockchain Diem. He was a principal developer at Novi (formerly known as Libra). Adeniyi Abiodun, who once served as the product lead for Novi, is now the chief product officer at Mysten. Kostas Kryptos, who previously held the same position at Meta, is the company’s principal cryptographer. The statement made today comes just after Aptos, a different blockchain that utilizes Move and is created by former Meta executives, added $150 million to its funding round, increasing its total cash received this year to $350 million. The two are regarded as the newest generation of Layer 1 blockchains and competitors to earlier blockchains like Ethereum, Solana, and Avalanche. Their task will be to entice cryptocurrency projects and developers away from incumbents and onto their platforms.

Cheng believes that Sui’s success will be determined by a novel approach to handling cryptocurrency transactions. According to him, “all blockchains today essentially execute transactions as groups,” which is known as head-of-line blocking. “We’re the only ones who use a totally different strategy.” Cheng compares blockchain transaction processing to getting on a train. He said that the present system requires you to wait until everyone has boarded before being relocated. The number of automobiles available to take groups to the exact location is higher on Sui. This is known as “intra-validator sharding” in technical terms. In blockchain systems, the parties who validate transactions are known as validators. In models based on proof-of-stake, participants lock up tokens on the network in return for the opportunity to verify new transactions and collect rewards. According to the announcement, Mysten expects that these and other developments will enable Sui to increase throughput and storage following developer and app demand while maintaining low transaction costs. 

However, the firm faces competition from other Layer 1 blockchains as well. Additionally, it must deal with an increasing number of scaling solutions, which are technologies built on top of blockchains to increase their efficiency. Fuel Labs received $80 million earlier this week to create its “modular execution layer,” which it thinks would enable smoother execution for cryptocurrency transactions. According to statistics from The Block Research, close to $5 billion is presently being used to interact with Ethereum utilizing Layer 2 tools like optimistic and ZK rollups. But Cheng is unconcerned. According to him, Layer 2 updates often only address a single component of issues. “We don’t think resolving one specific issue is enough to advance the profession. Therefore, we aim to approach everything from a new perspective. Cheng adopts the same perspective when discussing how Sui would differ from Diem, which was eventually sold on the cheap to Silvergate Capital, the holding company for Silvergate Bank, for $182 million after being repeatedly thwarted by authorities. Diem was explicitly designed for payments, according to Cheng. “We want to go even farther with that… How can we essentially make modifying or moving data as simple as transferring assets or programming assets? Therefore, we must go well beyond the Diem vision.

In addition to receiving ownership in Mysten, investors in the Series B financing will also obtain token warrants, entitling them to a piece of Sui’s native tokens, which will start trading once the blockchain is made available to the general public. In March, Mysten launched Sui’s open-source software development kit and started demonstrating it to programmers. According to the release, the business intends to utilize the $300 million to keep developing its technology, attract users to its platform, and hire staff, particularly in the Asia-Pacific area. Mysten and Aptos are often positioned as competitors because of their comparable leadership backgrounds, usage of Move, and fundraising paths. Yet their financial supporters are startlingly similar. In addition to leading Mysten’s $300 million investment, FTX Ventures and Jump Crypto, which had previously contributed to Mysten’s Series B round, co-led Aptos’ $150 million fundraising in July. A16z, Circle Ventures, Apollo, and Franklin Templeton are a few other investors that have supported both businesses. 

However, supporting competitors is prevalent in the blockchain industry. This is because “many investors believe in a multi-chain future, perhaps where certain blockchains have particular category knowledge and benefits based on their design,” FTX Ventures head Amy Wu said in a prior interview with The Block.

Tushar Jain, a managing partner of Multicoin Capital, which has backed Aptos and Solana but not Mysten, commented on the massive amount of money flowing into Aptos and Mysten to support two largely untested blockchains: “This is an enormous, enormous market and investors realize it, and they want to bet on this market — the smart contract platform market. This is not unusual nor unheard of.