Among the issues limiting blockchain adoption in the enterprise has been lack of scalability and privacy. Offchain Labs, a startup that spun out of research at Princeton, wants to help create more scalable smart contracts while shifting part of the process off of the public blockchain to increase privacy. Today, the company announced a $3.7M seed round led by Pantera Capital.
Compound VC, Raphael Ouzan of Blocknation, Jake Seid, managing director at Stone Bridge Ventures and other unnamed investors also participated.
The startup has created a protocol called Arbitrum that helps developers scale smart contracts in a way that’s difficult to do right now, says company co-founder Ed Felten. “We’re working to build a platform for smart contract development that provides what we think developers want, a combination of scalability so that you can scale to more transactions per second, more users, and to contracts that have more code and still have more data in them,” he explained.
In addition to scalability, the company believes that companies want a way to business without sharing everything they are doing, as is required on a public chain. “The second thing we think people want is privacy, meaning control over who gets to see what’s happening in their contract. So you don’t have to publish everything about your contracts, your code and everything it does on a public chain in order to get your work done.”
The last piece related to that is trust. “Our platform offers what we call the ‘Any Trust Guarantee’, which means that when you launch or deploy your contract, you specify a set of validators for it. And the guarantee we give you is that as long as at least one validator is acting honestly, your contract will execute correctly, no matter how evil or inattentive the other validators are,” Felten said.
The company was born out of research at Princeton University and began with what Felten called an academic prototype created in their labs. Felten is a computer science professor at Princeton, and also served as Deputy CTO to the White House under President Obama,
Those credentials and the prototype showed enough to attract investors. Today, the company is hoping to use the money to complete a Beta version of Arbitrum. He wouldn’t commit to a timeline, but said the product is close.
While Felten recognizes he is competing with giants like IBM and SAP in the enterprise blockchain space, he believes that the startup has come up with a solution to a persistent problem for blockchain developers, and they are releasing the protocol as open source to make it even more attractive.