Nischal Shetty-Led Shardeum Raises $18.2M for Blockchain Infinite Scalability Solution
Ethereum Virtual Machine (EVM) compatible sharded blockchain, Shardeum said on Tuesday that it has raised $18.2 million at a $200 million valuation. The round was led by Jane Street, Struck Crypto, The Spartan Group, Big Brain Holdings, DFG, Ghaf Capital Partners, Foresight Ventures.
In 2022, Nischal Shetty and Omar Syed teamed up to launch Layer 1 blockchain Shardeum – an Ethereum Virtual Machine (EVM) compatible sharded blockchain, which strives to achieve infinite scalability, decentralization and security. Simply put, it is looking to solve the two main problems of blockchains today: limited throughput and high gas or transaction fees.
On The Decryption History we had first reported the exact capital raised on the fundraiser.
After spearheading India’s largest cryptocurrency exchange WazirX for several years, Shetty has now set his sights on expanding to various countries with Shardeum. For this, he says The Decryption Historythat the attempt was to limit the amount of money each investor brought to Shardeum’s capability.
“It was part of the plan to make sure we don’t have anyone with a large stake in the network, to keep it as distributed as possible. We have investors from all continents, including Africa, Latin America, North America, Asia, Europe. So there has been a good mix of investors from all over the world, he adds.
Shardeum has raised funds from investors worldwide and is backed by 50 relevant strategic investors, including CoinGecko Ventures, Wemade, ZebPay, Jsquare, MH Ventures, Nestcoin, Veris Ventures, Tupix Capital, Mapleblock Capital and NetZero Capital.
With fresh capital brought in, Shardeum is now looking to expand its team globally. “The idea is to hire more people and expand the team on the technical side of things, the business side and the marketing side. We have a good, distributed team from India, the US, Myanmar, Brazil, Japan, the UK,” said Shetty.
Marquee investors like Balaji Srinivasan, Mayur Gupta (CMO at Kraken), Michael Montero (Co-founder of Resy – acq. American Express and Co-founder of CrowdTwist – acq. Oracle), Pankaj Gupta (VP Engineering at Coinbase), Harsh Rajat (Co-founder at Push Protocol), Nakul Gupta (Lead PM at Coinbase NFT Marketplace & Institutional Onboarding), Ajeet Khurana (Founder at Reflexical), Ravi Adusumalli (GP at Elevation Capital), Rohan Chauhan (Digital Assets at Hudson River Trading), Ganesh Swami (Co-Founder at Covalent), had participated in its seed round.
Tap into emerging markets
While crypto markets have ebbed and flowed in 2022, Shetty believes crypto and web3 adoption is growing in emerging markets such as Vietnam, India, Ukraine, Africa, Southeast Asia and Latin America. However, he believes that despite high demand in these markets, it is still expensive to trade. “If you look at the blockchain today, in the bull run, there’s an increase in fees like Ethereum costs $50-$100 transaction fees. It’s an unsustainable way for a blockchain to grow,” Shetty said.
Going forward, the startup intends to keep fees as low as possible to make it accessible to everyone in these markets. “We are targeting a fee as low as one to two rupees per transaction and no matter how many people use it, the fees will always remain low,” he adds.
The co-founder intends to make this available to Indian users as soon as possible and plans to host hackathons in India. “We have been in the Indian market, we understand the market and we will make sure that India gets the layer1 blockchain that it needs, where the fees are low and it can be scaled all the time,” he says.
Challenges of building a global blockchain
Despite having the upper hand in India, the founder admits that building a global blockchain has been a major challenge. In his opinion, there are two major barriers: new technology and adoption.
“It’s not an easy task to build a technology like this, especially something that’s innovative, where it can be scaled up with demand and my co-founder, Omar, started working on this in late 2017. So Shardeum’s core technology has been evolving for over four years and now it has been completed. So if someone wants to build a split blockchain, it will take them easily three to four years. So that is the first challenge.”
Many blockchains today are not scalable, Vitalik Buterin founder of Ethereum proposed the concept of scalability trilemma. This trilemma makes it difficult to create a blockchain that is scalable, secure and decentralized at the same time. However, many blockchain enthusiasts believe that sharding can solve the scalability problem.
To be clear, the development of cutting technology is not without its challenges. In many ways, the technology is still early in its concept, with many skeptical of its security and communications, considering that it has not yet been proven to be scalable.
As for widespread adoption, Nischal says, “The other big issue is adoption, and if you look at the tier one ecosystem today, there are blockchains that are five years old. Ethereum is like the first smart contract blockchain that’s been taken into spend a lot. So getting the right kind of adoption is going to be one of the other hardest problems to solve. Going forward, we want to make sure that Shardeum captures a lot of that growth as it grows.”
The future of web3
Shetty believes that in the future the market will favor a multi blockchain ecosystem, which in turn will create a significant amount of market share. “We’re already seeing people using different chains on Dapps (decentralized applications), there’s inter blockchain connectivity work being done. I would say the market is going to be big enough to accommodate multiple blockchains. It’s clear that there will be blockchains, which will have larger market share than the other. But I think any blockchain that is built well and understands the market will eventually gain significant market share,” he says.
As a result of the huge demand in the market, he predicts that L1 blockchains will experience greater demand in the coming years. “There is demand, there is a large market, the market is growing faster than the products being developed. The same is the case for L1. If you look at the newer blockchains, they are all being built, but the demand in the market is going to be much higher than that. We’ve already seen it happen. We will continue to see that, he concludes.
(This story was updated with additional input from the company.)