Obscuro Labs, the developer of the Ethereum Layer 2 network TEN (“The Encrypted Network”), announced that it raised $9 million in a funding round.
Enterprise blockchain firm R3 led the round, with Republic Crypto, KuCoin Labs, Big Brain Holdings, Magnus Capital and DWF Labs participating, Obscuro Labs said Friday. An R3 spokesperson confirmed to The Block that R3 led the round.
Obscuro co-founder Gavin Thomas told The Block that the $9 million round occurred in three tranches over the last two years, with the latest batch, worth nearly $3 million, closing last December. All tranches were structured as simple agreements for future equity (SAFE) with token warrants, Thomas said. He added that SAFE was optional as “some investors were only interested in signing token warrants.”
Thomas noted that the latest funding round brought Obscuro’s fully diluted token valuation to $30 million.
A former R3 executive, Thomas co-founded Obscuro in 2022 to develop TEN, an encrypted Ethereum Layer 2. More than half of Obscuro’s team, seven out of 13 people, comes from R3, where they developed R3’s permissioned blockchain, Corda, Thomas said. He added that R3 has supported TEN from its inception, with R3 co-founder Todd McDonald leading Obscuro’s funding round.
Regarding DWF Labs, a controversial firm, being an investor in Obscuro, Thomas said that DWF Labs invested in Obscuro “before any controversy surfaced” and that “controversy seems to surround their actions as a market maker, which we’re not using them for. They’re also one of our smallest investors.”
What is TEN?
TEN is an Ethereum Layer 2 network focused on encryption, allowing developers to choose which parts of the smart contracts they want private and which parts public.
“TEN leverages a pragmatic technology for encrypting the ledger: Secure enclaves,” Thomas said. “Secure enclaves provide robust confidentiality guarantees with certainty over the code running. They allow TEN to run the Ethereum Virtual Machine in an encrypted space and therefore offer smart contracts, decentralization, scalability and encryption.”
TEN essentially generates “confidential” roll-ups and aims to provide efficiency similar to Optimistic-based Layer 2 networks while maintaining “full encryption.”
When asked how TEN differs from other privacy-focused networks such as Aztec and Fhenix, Thomas said each takes a different technical approach: Aztec leverages zero-knowledge proofs, Fhenix uses fully homomorphic encryption, while TEN utilizes secure enclaves. TEN chose secure enclaves because of various factors, including performance, minimal friction as the user and developer experience is “identical to Ethereum,” and support amongst institutions, Thomas said.
TEN, as an encrypted Ethereum Layer 2, would “massively open up the design space,” allowing a new generation of on-chain games, decentralized finance, real-world assets, and institutional use cases to be developed, according to Obscuro Labs.
TEN mainnet and token launch
TEN is currently in testnet mode and is expected to launch the mainnet in October. Meanwhile, TEN’s native token will launch in June, said Thomas.
When asked why to launch the token before the mainnet, Thomas said, “Our token is a governance token, and we want to decentralize key decisions as much as possible in the lead-up to the mainnet.”
“A key one for us is the duration of the revelation period — a predefined maximum period in which transactions are revealed to help ensure regulatory compliance,” he said. “Along with this is the implementation of a whitelist where particular dApps can be exempt from this requirement as they have their own safeguards in place, e.g., institutional applications. We’d like the community to engage on which dApps should be included in this whitelist in preparation for mainnet.”
With fresh funding, Obscuro looks to expand its 13-member team by hiring across business development and engineering functions, Thomas added.
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