Former Obama Chief Technology Officer builds blockchain SaaS, which has raised $3.7 million

Former Obama Chief Technology Officer builds blockchain SaaS, which has raised $3.7 million

Offchain Labs, a startup founded by former Obama administration officials, has raised $3.7 million in seed round financing.

The round of financing was led by Pantera Capital, including participants such as Compound VC. Offchain Labs co-founder Ed Felten, a professor of computer science at Princeton University and former chief technology officer of the Obama administration, told CoinDesk that his software-as-a-service (SaaS) startups will focus on "expanding smart contracts" to enterprise-level use cases.

“At the moment, we focus on private chains, enterprise solutions and gaming,” Felten said. “The current product runs as the second floor at the top of Ethereum, but it is also compatible with Ethereum [self].”

Taking a step back, Ethereum quickly became overburdened in 2017, as the transactions associated with the digital collectibles app CryptoKitties drowned the network. Felten said that since then, the expansion of Ethereum has not improved significantly, providing an opportunity for companies such as Offchain Labs to apply tiered expansion solutions for this evolving infrastructure.

"As the amount of storage in decentralized applications grows larger and the amount of code that needs to be executed becomes larger, the chain cost of Ethereum gasoline costs will increase," Felten said. “This limits the complexity and complexity of the games you can have.”

So Offchain is taking an experimental approach to solve this problem.

His founding team consisted of academic researchers, including Cornell Technology's postdoctoral researcher Steven Godfed, who co-authored Princeton's textbook on bitcoin and cryptocurrency.

“We think we can really lower the price you pay for smart contracts, the same trust and confidence,” Felten said.

cut costs

Felten said that at least six well-funded startups offer SaaS options related to blockchain, and Offchain's system will differentiate itself by providing the cheapest model.

BlockApps is a project that was spun off from ConsenSys and is currently undergoing Series A financing and moving from proof of concept to production. Similar to the project, Offchain Labs plans to build blockchain networks for specific industries, and customers can determine the certifiers for each network.

Felten said the company's alpha version is scheduled to launch this summer, before July 1, before it can start attracting potential customers.

“Obviously there are still many people working on this goal,” he said, acknowledging that SaaS startups are fiercely competing for a small group of companies interested in blockchain.

Another competitive project is the Swedish SaaS startup Chroway. According to Chromaway co-founder Or Perelman, the company received $11 million through a private placement of money to Arrington XRP Capital and Neo Global Capital late last year. The startup also has heavyweight business consultants such as Liteco coin creator Charlie Lee.

Considering this competitive landscape, Pantera Capital's co-founder Joey Krug told CoinDesk that Offchain Labs will provide a clear advantage to decentralized exchanges compared to models like Chromeda, which does not require participants or verification. Support the network through mortgage tokens.

“The trader will hesitate,” Kruger said. “They will say, 'Why do I need to invest more than the actual trading needs?' So, although they have a good team and all the usual configurations, the main difference between Offchain is still the lower capital requirements.”

Krug expects Offchain to release an alpha version in 2019, focusing on Ethereum-oriented gaming applications and making subsequent adjustments based on user feedback.

“I am very excited to see some of the main projects of the early projects this year, and I hope that by 2020, there will be more and more applications that actually use these main network developments,” Krug said.

Source: Blockchain pencil