It has been reported that Movement Labs, which is developing an Ethereum Layer 2 blockchain based on Facebook's Move language virtual machine, is undergoing a $100 million Series B financing 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 department Nova Fund of London-based investment firm Brevan Howard. The company had previously completed a $38 million Series A financing led by renowned cryptocurrency investment firm Polychain Capital in April this year, and received support from early supporters of the Move programming language, Aptos Labs.
Movement Labs was founded in 2022, aiming to address vulnerabilities and inefficiencies in smart contracts within the Ethereum ecosystem. Ethereum is the second largest blockchain network (by usage and market cap) after Bitcoin.
The company has developed what is known as a Layer 2 blockchain, which is a decentralized digital ledger technology built on top of another blockchain network (in this case, Ethereum). It helps to handle 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 cryptocurrency payment project by Facebook (under Meta Platforms Inc.) to ensure the security of smart contracts. Smart contracts are self-executing programs that run on blockchain networks and are core to 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 costs less than one cent per transaction.
The average transaction speed on the Ethereum blockchain is about 15 transactions per second. This has led to the emergence of numerous Layer 2 solutions that are dedicated to increasing 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 in test mode last month, along with the release of the MOVE token, which is currently traded on major cryptocurrency exchanges including Binance and Coinbase. According to CoinGecko, the token's market cap once peaked at $2.7 billion but has now fallen to about $2 billion.