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Nischal Shetty's Shardeum raises seed round of $18.2 mn at a $200 mn valuation

Shetty expects the network to grow over the next 3-4 years, as the ecosystem moves from exchanges to decentralised products. The network also plans to cap the gas fee at Rs1-2

October 18, 2022 / 06:35 PM IST
Shardeum co-founder Nischal Shetty, who is also the co-founder of WazirX,

Shardeum co-founder Nischal Shetty, who is also the co-founder of WazirX,

Shardeum, a layer-1 blockchain, has raised $18.2 million at a valuation of $200 million in a seed round led by Jane Street, Struck Crypto, The Spartan Group, Big Brain Holdings, DFG, Ghaf Capital Partners, and Foresight Ventures. This round, which has been in the works for over a year, comes amid a difficult environment in which a number of global crypto firms have declared bankruptcy.

Shardeum has attracted strategic investors such as CoinGecko Ventures and influential angel investors such as former Coinbase CTO Balaji Srinivasan, Mayur Gupta (CMO at Kraken), Michael Montero (Co-founder, Resy and CrowdTwist), Pankaj Gupta (VP Engineering at Coinbase), Harsh Rajat (Co-founder, Push Protocol), Nakul Gupta (Lead PM at Coinbase NFT Marketplace & Institutional Onboarding), Ajeet Khurana (Founder at Reflexical) and more.

Shardeum was founded by Nischal Shetty, co-founder of WazirX, and blockchain architect Omar Syed, who have been working on this project since 2017. Layer 1 refers to a base network, such as Bitcoin or Ethereum, where the blockchain network can validate and finalise transactions without requiring another network.

The Beta network is scheduled to launch by the end of the year, with the blockchain aiming to process 200 transactions per second (TPS).

“By end of this month, we will demonstrate autoscaling for blockchain network. This means that TPS can increase if there is a higher demand. So, if there is a demand for 100 TPS, Shardeum will complete it. In a bull market, transactions per second are always high whereas, in a bear market, the usage goes down in which case our capacity should go down as well,” said Shetty.

The Layer-1 blockchain plans to acquire 25 million users in India and target other emerging markets markets such as Africa, South East Asia among others.

Shardeum intends to use the new funds to increase its marketing efforts, expand its development team, and expand its research. Shardeum will also actively host hackathons in India and the US over the next year, as well as provide a platform that incentivizes developers to build and grow the Shardeum ecosystem, according to a statement from the company.

Shardeum's native utility token, SHARD ($SHM), which has a fixed supply of 508 million tokens, will be released alongside the mainnet, according to Shetty.

Competition with Ethereum

Shardeum will be taking on direct competition with Ethereum, which has attracted developers to build decentralised applications.

“If you look at the ecosystem today, the total requirement is 300-500 TPS overall. But, as the ecosystem grows, it will become millions. And none of the blockchains today can serve that. So scaling it to millions, is not possible today and Sharedum will help in solving that,” said Shetty.

Shetty expects that the network will grow over the next three to four years as the ecosystem transitions from exchanges to decentralised products. Shetty added that the network plans to cap the gas fee at Rs 1-2. A gas fee is something that the developers need to pay all in order to perform any function on a blockchain.

To put this in context, Ethereum's gas fees have been trading between $2 and $4 this month. This has dropped dramatically from its average price of $50-$100 since the blockchain switched to proof of stake last month.

Shardeum in its pitch deck said, “The crypto ecosystem is poised to grow from 300M to 1B people in the next 3 years. A large portion of this growth will come from emerging markets such as India, Brazil, Vietnam, Nigeria, Venezuela, Thailand and Turkey. For users in these countries, low gas fees are a must.”

“Shardeum will work on ensuring it captures the bulk of new users onboarding to crypto in other emerging markets. At the same time, Shardeum will invest in efforts to attract Ethereum developers to build on its EVM-compatible smart contract platform that will keep fees low even as usage grows; ensuring that developers do not have to move again in the future.”
Sanghamitra Kar
first published: Oct 18, 2022 06:35 pm