Socket, a protocol designed to enhance communication between different blockchains, has raised $5 million in a funding round co-led by Coinbase Ventures and Framework Ventures. This investment will support Socket’s collaboration with Coinbase, a prominent cryptocurrency platform.
As a cross-chain protocol, Socket facilitates interactions between blockchains, enabling seamless transfer of assets and data across multiple networks for users and developers. As more layer-1 and layer-2 solutions emerge, the ecosystem becomes fragmented. Blockchain technology’s future lies in interoperability, according to Socket.
By bridging various chains, Socket aims to provide users with a unified experience akin to operating on a single blockchain. The recent funding round reflects the growing interest among investors and industry players in interoperability solutions as they recognize the importance of bridging for the widespread adoption of blockchain technology.
To illustrate this trend, Swift, the global inter-bank messaging system, demonstrates. Last week, Swift declared their experiments: transferring tokenized value across private and public blockchains. They accomplished this feat using Chainlink’s Cross-Chain Interoperability Protocol.
Coinbase Partnership Boosts Socket’s Cross-Chain Vision
Vaibhav Chellani, co-founder of Socket, emphasizes that cross-chain communication plays a vital role in achieving scalability and interoperability within blockchains. He believes that rollups, which are layer-2 solutions batching transactions off-chain before settling them periodically on the main chain, hold the key to this vision. According to Chellani:
“For us, to have this scalable future, rollup-to-rollup communication is really important,” he said. “I think the scaling future, and the multi- or cross-chain future are the same thing.”
Socket’s protocol utilizes zero-knowledge proofs, a cryptographic technique that enables secure and efficient cross-chain transfers while maintaining data privacy. In addition, Socket has plans to introduce its native token for governance and incentivization purposes within the protocol.
Furthermore, Socket has partnered with Coinbase. This partnership offers bridging opportunities for Coinbase Wallet and Base developers. The base is a layer-2 network built on Ethereum currently under development by Coinbase.
It’s worth noting that Coinbase Ventures, the venture capital arm of Coinbase, invests in early-stage blockchain startups, while Framework Ventures is a prominent venture capital fund concentrating on decentralized finance (DeFi) projects.
Various blockchain projects have shown interest in Socket’s protocol due to its cross-chain capabilities. One such example is Polygon, a layer-2 scaling solution for Ethereum, which has integrated Socket to facilitate faster and more affordable asset and data transfers between Polygon and other chains.
Similarly, Harmony, a sharded blockchain platform, has collaborated with Socket to enhance its interoperability with Ethereum and other networks. Through partnerships like these, Socket aims to foster a more interconnected and inclusive blockchain ecosystem.