The blockchain space is about to get even more crowded as Movement Labs, a San Francisco-based software development team, has closed a $38 million funding round to build a layer 2 Ethereum blockchain. The Series A funding was led by Polychain Capital, a crypto VC mega firm led by Coinbase alum Olaf Carlson-Wee, with participation from other digital-assets-focused investors including Hack VC, dao5, and Robot Ventures.
This investment comes on the heels of other sizable funding rounds for companies building new blockchains, including Monad Labs, which raised $225 million to build a layer 1 blockchain, and Berachain, another layer 1 developer that recently announced a $100 million Series B. The flurry of fundraises reflects a return to crypto-focused venture investments, but it also indicates an increasingly competitive landscape for companies hoping to build the next Bitcoin or Ethereum.
Movement Labs aims to differentiate itself by building the first layer 2 blockchain on Ethereum that utilizes Move, a programming language originally developed by Facebook for its ill-fated stablecoin project, Diem. According to cofounders Rushi Manche and Cooper Scanlon, the company is “delivering Move to the front door of Ethereum” and serving the Ethereum ecosystem. They believe that many developers who have been hesitant to leave Ethereum will now be able to benefit from the security and performance of a next-generation virtual machine.
The company plans to announce its devnet soon and launch its mainnet in the late summer or early fall. Additionally, Movement Labs will launch its own token, tentatively named Move. The Ethereum community will be watching closely to see how Movement Labs’ technology stacks up against other layer 2 solutions.
The proliferation of new blockchains may seem like overkill to some, but it’s a sign of the growing interest in blockchain technology and the increasing competition in the space. Bitcoin, the first blockchain, created the concept of cryptocurrency in 2009, and Ethereum, launched in 2015, introduced smart contracts and decentralized applications. Since then, developers have been working to improve the speed and cost of blockchain transactions, with layer 2 solutions like Movement Labs’ offering promising faster and cheaper transactions.
Two recently launched blockchains, Aptos and Sui, also boast teams of developers from Facebook who helped build the Move programming language and the Move Virtual Machine. However, Movement Labs’ cofounders believe that their approach, building on top of Ethereum, will be more successful in attracting developers and building a thriving ecosystem.
“Aptos and Sui raised a lot of money, but they failed to execute on the community aspect,” Manche told Fortune. “We’re building a tool called Move Stack, which will allow the Move Virtual Machine to be adoptable by other blockchain networks outside of Ethereum. We’ve been contacted by quite a few different blockchains, including Avalanche and Binance Smart Chain.”
Movement Labs’ thesis is that developers will want to build using Move, which they say is more intuitive than other languages like Solidity, but still be part of the Ethereum community. “Everyone’s trying to bring Facebook on-chain,” Manche said. “We’re bringing the language that Facebook built to Ethereum.”
