Movement Labs Raises $38 Million to Build Layer 2 Blockchain on Ethereum with Facebook Technology

The blockchain race is about to get even more crowded: Movement Labs, a San Francisco-based software development team that is building a layer 2 Ethereum blockchain, has closed a $38 million funding round, it learned in exclusive from Fortune.

Capital of the polychainthe mega cryptocurrency company led by Coinbase Olaf Carlson-Wee, led the Series A, with participation from other digital asset-focused investors, including Hack VC, dao5 and Robot Ventures.

The increased movement comes on the heels of larger rounds for other companies building new blockchains, including Monad Labswhich raised $225 million to build a Level 1, and Berachainanother Tier 1 developer that recently announced a $100 million Series B project.

While the flurry of fundraising reflects a return to cryptocurrency-focused venture capital investing, the concentration of capital around blockchains also points to an increasingly competitive landscape for companies hoping to build the near future. Bitcoin OR Ethereum.

In an interview with Fortune, Movement co-founders Rushi Manche and Cooper Scanlon said they hope to differentiate Movement by building the top-level 2 blockchain on Ethereum that uses Move, a programming language originally created by Facebook for Diem, it is bad lucky stablecoin project.

“We’re bringing Move to Ethereum’s front door, and it’s this ecosystem that we’re serving,” Scanlon said. “Many people who have never wanted to leave Ethereum will be able to benefit from the security performance of a next-generation virtual machine for the first time.”

According to Scanlon and Manche, Movement Labs will announce its devnet soon and aims to launch its mainnet in late summer or early fall. The company also plans to launch its own token, tentatively named Move.

The Ethereum movement

To outside observers, the proliferation of new blockchains may seem excessive, an opinion often shared by industry players. The first, Bitcoin, created the concept of cryptocurrency in 2009; the next major advance came in 2015 with the launch of Ethereum, which introduced smart contracts and the ability to build decentralized applications ranging from exchanges to money lending protocols.

Developers have since chafed at the speed and cost of blockchains, with a number of layer 2s built on top of Ethereum, as well as new layer 1s like Solana, promising faster and cheaper transactions. As evidenced by recent congestion issues afflicting Solana, despite his mania for memecoins, problems remain.

Two recently launched blockchains, Aptos and Sui, came with a new value proposition: Each boasted teams of Facebook developers who helped build the crypto-focused programming language called Move. They also created the Move Virtual Machine, a kind of computer program underlying a blockchain that would be a next-generation upgrade of the Ethereum Virtual Machine.

As Manche and Scanlon explained, while Move and its new virtual machine would have better security and capabilities than EVM, most developers were still building for Ethereum, which had much stronger community support. Even if Sui and Aptos could boast better performance, they couldn’t necessarily build a thriving new ecosystem.

“Aptos and Sui raised a lot of money,” Manche told Fortune. “But they failed to do the community aspect.”

Movement, in contrast, is building its layer 2 on top of Ethereum, but using the Move programming language and MVM. It is also building a tool called Move Stack, which will allow the Move Virtual Machine to be adoptable by other blockchain networks outside of Ethereum. Scanlon said he has been contacted by “several” different blockchains, including Avalanche and Binance Smart Chain.

Their thesis is that developers will want to build using Move, which they say is more intuitive than other languages, such as Solidity, but still be part of the Ethereum community. “Everyone is trying to get Facebook on-chain,” Manche said. “We are bringing the language created by Facebook to Ethereum.”

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