Crypto Project Solana Labs Raises $314 Million to Ramp Up DeFi Investments

Solana Labs Inc. announced it raised $314 million in a new funding round led by Andreessen Horowitz, one of the leading VCs in Silicon Valley, and Polychain Capital.

The transaction, which was organized as a purchase of Solana’s digital token SOL, will help the crypto startup to continue investing in its DeFi technology.

Founded in 2017, Solana is a crypto startup that rolled out a blockchain network that according to some, is faster and more energy-efficient compared to Ethereum and Bitcoin.

Solana leaders claim their blockchain is able to handle over 50,000 transactions a second, a figure that could rise even more with new hardware. The scalability could make Solana more competitive with financial giants like Visa, which says it can process more than 65,000 transactions a second.

This compares to Ethereum, which currently handles only 13 transactions per second, but the speed and energy efficiency of the world’s second-largest blockchain is expected to substantially improve after the long-awaited upgrade that could launch this year.

The decentralized finance sector is currently in need of a better blockchain and Solana is hoping to take advantage of that opportunity. The majority of DeFi ventures still use Ethereum, which will seen substantial network congestion in 2021, hence the slow settlement times and high fees.

“Solana has the most ambitious tech road map of any blockchain, and they’ve been making impressive progress on it,” said Sam Bankman-Fried, chief executive of Alameda Research, one of Solana’s backers in the new funding round.

“It’s a blockchain that has the potential to support a DeFi ecosystem with world-scale activity.”

Solana also claims it spends less electricity compared to Ethereum and Bitcoin, which could be another advantage for the crypto startup as worries over the energy use of cryptocurrencies continue to rise.

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