Subspace Labs raises funds for a more scalable and sustainable blockchain – TechCrunch
As the crypto space grows in popularity, some of the most popular blockchains are struggling to keep up with user demand.
New projects aim to address issues such as the notoriously high power consumption, high gas fees, and low transaction throughput that plague some of the major blockchain networks. Ethereum, for its part, announced plans to transition this year from its energy-intensive proof-of-work mechanism, which relies on mining rigs to validate transactions, to a more sustainable proof-of-stake system that allows users to help validate the transactions of the network by temporarily depositing, or staking, a certain amount of Ethereum tokens.
Founded in 2018, Subspace Laboratories just announced that it has raised $32.9 million to further develop a new blockchain which aims to balance scalability, security and durabilityits co-founder and CEO Jeremiah Wagstaff told TechCrunch in an interview.
Wagstaff said that while “third generation” blockchains such as Cardano, Solana, and even the revamped Ethereum (known as ETH 2.0) are more scalable than their older counterparts, they still make tradeoffs. security and decentralization inherent in proof-of-stake. system. Subspace, which Wagstaff called “the first fourth-generation blockchain,” is unique in that it scales in a linear fashion – as the number of nodes on the Subspace network increases, the cost of a transaction decreases.
While proof-of-stake is more environmentally friendly than proof-of-work, Wagstaff says it’s “not fair or permissionless” because it perpetuates inequality, as those who already hold large amounts tokens reap greater rewards for mining, comparing proof of stake protocols to plutocracies. Instead of rewarding users on a “one coin, one vote” basis, as in proof-of-stake, Subspace uses a so-called proof-of-capacity protocol, which allows users to mine disk space from their hard drive to validate transactions.
Although proof-of-capacity systems have generally been proven to consume less power than proof-of-work systems, there are concerns about the costs of e-waste associated with networks and their effect on global supply chains. Although proof-of-capacity experiments have already been attempted, including by BitTorrent co-founder Bram Cohen’s Chia blockchain, Wagstaff claims that Subspace’s “one disk, one vote” system is even more energy efficient and has other benefits, including file storage. .
Beyond its consensus mechanism, Wagstaff claims that Subspace makes storing data much cheaper than on other blockchains by incentivizing users to run archiving nodes, which store historical data relating to a particular blockchain. To store data on Subspace, “you just write data to history [of the blockchain], but we kind of designed it that way from the start, so there’s a pricing feature for it. It gets cheaper because you have more network storage,” Wagstaff said.
Storage can be particularly important for NFT holders, who do not normally store the data associated with their digital assets directly on the blockchain on which the NFT was created due to the high cost. NFT holders using a marketplace like OpenSea can have the data associated with their NFTs stored on the Ethereum blockchain, while the media assets themselves are stored on peer-to-peer file storage systems like The InterPlanetary File System (IPFS). Subspace can also tie into most other blockchains as an external storage provider, and it provides a more permanent storage solution than IPFS, Wagstaff said.
“You can actually store your data on Subspace and IPFS at the same time. Subspace is kind of like the cold storage layer, where it’s always there forever, and IPFS is the way to get it very quickly when it’s popular,” Wagstaff said. Even if a storage provider or crypto exchange goes down or goes bankrupt, Subspace would still provide an availability layer to unlock that data, he added.
Pantera Capital led the latest round of Subspace alongside Coinbase Ventures, Crypto.com, Alameda Research, ConsenSys Mesh, and other venture capital and strategic firms. Prior to this round, Subspace raised a $4.5 million seed round last summer, and before that it was fully funded by grants from the US National Science Foundation and the Web3 Foundation, according to the company.
Wagstaff said he plans to use the new product to grow the globally distributed Subspace Labs team from 12 employees today to approximately 40 people by the end of 2022. Subspace will also use the capital to expand its integrations with projects on other blockchains and build a dedicated product team to support its Subspace Meta Services (SMS) segment, which provides tools and interfaces to crypto users and developers to help them manage their business across multiple chains.