The funding comes at a time when investment in the crypto ecosystem is becoming scarce.
Layer 2 data storage project EthStorage has raised $7 million in its seed funding led by crypto investment fund dao5. The round saw the participation of Foresight Ventures, Galxe, Gate Ventures, SevenX Ventures, and Sky9 Capital. Avant Blockchain Capital, Cloud Nine Capital, DragonRoark, Future Money Group, GeekCartel, Rebase D. Ventures, Vitalbridge, W3.Hitchhiker. Some other angel investors also made a contribution.
EthStorage has successfully raised $7M in a seed round with a $100M valuation. It was led by @daofive, with participation from prominent investors like @SevenXVentures @ForesightVen @dragonroark @Sky9Capital @avantfund @fmgroupxyz @gate_ventures @Galxe @geek_cartel @HitchhikerW3… pic.twitter.com/jplz6an5iQ
— EthStorage (@EthStorage) July 27, 2023
Following the seed funding round, the company is now valued at $100 million. Using the funds, EthStorage plans to expand its team, research and develop more products, and attract more ecosystem partners.
Decline in Crypto Funding
The funding comes at a time when investment in the crypto ecosystem is becoming scarce. From $12.14 billion raised in Q1 2022 to just $2.34 billion in Q2 2023, venture capital investment in the industry has severely declined.
Lydia Chiu, VP of business development at Ava Labs, noted the decline in venture capital funding may be due to the severe regulatory stance of the US. This, she said, has caused a lot of crypto-related deal flows to be patterned after “traditional venture structures, like raising equity, instead of token investments or simple agreement for future tokens (SAFT)”.
Interestingly, EthStorage’s funding round was structured as a SAFT, according to Kevin Yang, managing partner at Gate Ventures. This is suggestive of investor confidence in the project.
About EthStorage
EthStorage is a Layer 2 storage solution built on the Ethereum network. The company was established in 2022 by Qi Zhou, founder of blockchain infrastructure startup QuarkChain. EthStorage is programmed to reduce the cost of storing large chunks of data on the Ethereum network while expanding its storage capacity. This low cost of large data storage by EthStorage is expected to enable a fully decentralized network in the future. Already, the rollup is integrated with EVM. It is also compatible with Solidity, Remix, Hardhat, and MetaMask.
According to Gate Ventures, EthStorage is paving the way for an innovative, cost-effective, and dynamic storage solution that has the potential to address the limitations faced by existing storage options.
More recently, the team introduced the Web3:// Access Protocol that will allow users to browse a fully decentralized dynamic website on EVM. The company also called on interested developers to come and build with them on the project. So far, the EthStorage team received two research grants from the Ethereum Foundation. It also emerged as the winner in the evaluation of the EDCON 2023 Super Demo.
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