It has been reported that Movement Labs, which develops Ethereum layer-2 blockchain based on Facebook's Move language virtual machine, is undergoing a $100 million Series B funding round, with the company valued at approximately $3 billion.
According to multiple sources from Fortune and Reuters, this round of financing will be co-led by CoinFund and the digital asset division Nova Fund of London investment firm Brevan Howard. The company completed a $38 million Series A funding round led by renowned cryptocurrency investment firm Polychain Capital in April this year, and received support from Aptos Labs, early supporters of the Move programming language.
Movement Labs was founded in 2022, developing its blockchain network aimed at addressing the vulnerabilities and inefficiencies of smart contracts in the Ethereum ecosystem. Ethereum is the second largest blockchain network after Bitcoin (measured by usage and market capitalization).
The company has developed a so-called layer-2 blockchain, a decentralized digital ledger technology built on top of another blockchain network (in this case, Ethereum). It helps process blockchain transactions for running decentralized applications and addresses security and privacy issues. Movement states that faster and lower-cost transactions can be achieved through better transaction organization and compression, as well as providing higher security.
Movement uses the Move programming language developed for its discontinued Diem blockchain payment project by Facebook (Meta Platforms Inc.) to ensure the security of smart contracts. Smart contracts are self-executing programs running on blockchain networks and are at the core of decentralized applications.
Movement states that using Move and its layer-2 blockchain technology can increase Ethereum's transaction speed to 160,000 transactions per second, with transaction fees less than one percent of a cent.
The average transaction speed on the Ethereum blockchain is about 15 transactions per second. This has led to a surge of layer-2 solutions, all dedicated to enhancing transaction speeds more efficiently. Major examples include: the financial-specific solution Unichain from decentralized cryptocurrency exchange Uniswap Labs; Blockstream Corp Inc., which raised $210 million last year; the developer-friendly layer-2 solution Base from cryptocurrency exchange Coinbase Global Inc.; and the major Ethereum scaling solution Polygon.
Movement launched its mainnet blockchain last month in a test mode, while releasing the MOVE token, which is currently traded on major cryptocurrency exchanges including Binance and Coinbase. According to data from CoinGecko, the token's market capitalization once peaked at $2.7 billion but has now fallen to around $2 billion.