Ex-Meta staffers raise $200 million in funding from a16z, Tiger, and Multicoin to realize Facebook's crypto ambitions

Silvergate Capital acquired the Diem technical assets for $182 million earlier this year, effectively ending Facebook's grandiose ambition to create a crypto payments network. The transaction demonstrated how Facebook, now Meta, is left with few regulator-approved ways forward to become a key player in the blockchain ecosystem, a conclusion that has cost the corporation a slew of talent, including crypto chief David Marcus.

Some ex-Meta employees are taking up the open source Diem blockchain mantle in an effort to actualize the idea of a decentralized network that they claim is created to serve billions of users and is geared to cater to huge corporate customers early on. Aptos, a project founded by ex-Meta employees who only left the firm in December, has already received unicorn money from Andreessen Horowitz and a slew of other prominent web3 investors.

"We are the original creators, researchers, designers, and builders of Diem, the first blockchain developed for this purpose." While the rest of the world never saw what we produced, our work is far from done," Aptos CEO Mo Shaikh wrote in a blog post last month.

According to TechCrunch, the business has closed a $200 million "strategic" investment headed by a16z, with participation from Tiger Global, Katie Haun, Multicoin Capital, 3 Arrows Capital, FTX Ventures, and Coinbase Ventures. Silvergate Capital is another notable investor in the initial round, while the Aptos team insists that they would not license or use any of Silvergate's Diem IP as they build out their blockchain.

The founders did not reveal the valuation but stated that they were "far off into unicorn territory." (According to an investor memo seen by TechCrunch, the round's equity valuation is $1 billion, but after accounting for tokens, it's much higher.) The Aptos team declined to provide specific data.)

The Aptos blockchain will be a Layer 1 system, which means it will not be built on top of current blockchains such as Ethereum or Solana, but will instead develop its own decentralized network. Along with the investment announcement, Aptos announced the formal launch of its "devnet," which will allow developers to experiment and build on the Aptos blockchain prior to a public release, which the team believes will occur in Q3.

Anchorage, Binance, Coinbase, Livepeer, Moonclave, Paxos, Paymagic, Rarible, and Streaming Fast, according to the Aptos team, are already engaged with the startup, providing feedback and contributing code on devnet.

Aptos' goal is to create a more scalable blockchain with faster transactions and lower fees than today's popular networks. The founders aspire to create a more stable and predictable network for corporate clients interested in embracing blockchain technology.

There are only a limited number of ways to scale blockchains. For scaling, proponents of Ethereum and its scaling solutions, for example, are counting on rollups and sharding – techniques that separate blockchains into smaller parts and then re-connect them.

However, several other gamers believe there is a better way to approach this problem.

"Current blockchains are just not as dependable as conventional financial rails; we've witnessed issues with downtime and outages that continue for hours," Aptos CTO Avery Ching told TechCrunch in an interview.

According to Kyle Samani, managing partner of Multicoin Capital, a venture capital firm known for being an early backer of several blockchains, including Solana, the aforementioned approach increases latency, technical complexity for developers, makes cross-chain apps "inherently fragile," and breaks composability.

"The crypto business portrays this discussion in a quite binary manner." However, there is nuance. These techniques do not have to be mutually incompatible. While most in the industry have typically advocated for dividing up the state into several pieces, we have advocated for enhancing single-shard performance to optimize UX, DX, and maximize the design space for composable crypto apps. "That conviction drove us to triple down on Solana in 2019 and 2020, and to hold through a parabolic climb in 2021," he wrote in a blog post.

While Diem supporters such as Andreessen Horowitz may gather around a team attempting to pick up the mantle of what Facebook was attempting to establish with Diem and Libra, some in the crypto community remain wary of accomplishing a vision of web3 conceived by Facebook.

"To be clear, we have no formal relationship with Facebook and no funding from them," Shaikh said in an interview with TechCrunch.

"We're really enthused about a shared vision for the world of web3." We can now focus on everyone instead of just Meta, which is a benefit of our being external. Our goal is to collaborate with some of the world's most well-known brands and technology businesses to create a web3 environment for the masses."

Another challenge/opportunity that Aptos has is how soon it can attract developers. The company is seeking to attract developers in part by utilizing Move, an open source programming language developed by Meta. "Move is designed for safe resource management; it's deterministic and metered," Ching explained, adding that the language is well-suited for stringent auditing and verification processes.

"Second, our team has built the lowest latency optimistically responsive Byzantine Fault Tolerance protocol, which we have tested and audited extensively for many years." "We are actually on the fourth iteration of this protocol, and we have pushed upgrades to the protocol," he stated, asserting that the protocol has experienced no downtime in private net testing throughout the years.

"The Move programming language has been rigorously battle tested and is a perfect environment for constructing safe, production-grade contracts capable of serving billions of people," Multicoin Capital's Samani said in a statement to TechCrunch. We fully expect Aptos to hit the ground running and quickly establish itself as a competitive candidate for Layer 1."

Aptos is evaluating various pathways for Ethereum and Solidity integration on its network in order to entice developers.

"I have a strong connection to the Ethereum community." It's apparent that we live in a multi-chained world: individuals have constructed bridges, solutions that either solve for scalability or may go from one L1 to another in the chase of greater markets," said Shaikh, who formerly led strategic alliances for Meta's wallet Novi.

"We'd like to be a member of that ecosystem." We're not necessarily here to compete. We want to supplement [them], and the issues [the community encounters] — whether it's something like the recent wormhole occurrence — give us a clear indication that things must be constructed carefully from the ground up," Shaikh added.

"We've heard from Solidity and Ethereum developers that they're running into constraints, that they're running into issues where you have to spend hours auditing your smart contracts." Smart contract auditors only have so much capability right now. Those items continue to be a source of discomfort. They are seeking for more L1s to develop directly on top of rather than simply moving over assets or going through bridges, as this frequently weakens security."

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