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Binance Labs, the $10 billion venture capital and incubation arm of the crypto exchange Binance, has invested an undisclosed sum in Sophon, a ZKsync "elastic chain" or a Layer 2 network being built using Matter Labs' modular, open-source framework, Stack.
Talks between Binance Labs and Sophon began in the summer, and the investment round was concluded in August, Sebastien ("Seb"), Sophon's semi-anonymous co-founder and CEO and former head of DeFi at ZKsync, told The Block. The round was structured as a simple agreement for future tokens (SAFT), Seb said, declining to comment on Sophon's valuation.
The Binance Labs investment brings Sophon's total funding raised to date to over $70 million. Sophon raised around $60 million via a node sale in May and $10 million in a seed round earlier this year. Seb said, "No further funding is expected."
Sophon is a zkSync elastic chain, formerly called "hyperchain." Put simply, it is a Layer 2 network being built using Matter Labs' ZK Stack framework.
When asked how building on Sophon differs from building on ZKsync, Seb said that blockchains like ZKsync Era, Optimism and Arbitrum are and will remain generalist, serving mainly as liquidity and DeFi hubs. However, to connect more deeply with retail, a strong focus on platform and product is needed, and Sophon helps with that.
"In the web2 space, nobody cares whether they are using Amazon Web Services, Microsoft Azure or Google Cloud Platform when they use Booking.com or Netflix; what matters is the platform experience, coupled with distribution channels and in some cases, culture and/or community," Seb said. "Our vision is to create a seamless, engaging, and culturally rich ecosystem that integrates web3 with everyday lifestyle applications."
Seb said he sees Solana and Base as Sophon's closest competitors, as they are the two "most retail-driven ecosystems."
Speaking of Sophon's competitive edge, Seb said the ZK Stack allows Sophon to differentiate itself "by leveraging native account abstraction, gasless experiences and the ability to power the base gas token with SOPH." Seb said Sophon will focus on creating an ecosystem of consumer-focused web3 applications, including gambling, ticketing, social and more.
Sophon recently announced partnerships with Aethir (AI), Azuro (predictions), and Beam (gaming) as its initial three ecosystem projects and will reveal the rest in the next few months, Seb said.
Sophon is expected to launch its mainnet next month, Seb revealed the timeline for the first time to The Block. He said the SOPH token is also "expected to be deployed alongside the mainnet," adding that more details about the token will be shared at a later date.
There are currently around 20 people working for Sophon, Seb said, adding that he plans to hire a senior Rust developer and a business development person based in the Asia Pacific.
Written by Yogita Khatri for theblock.co