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Blockchain Startup Kadena Raises $12 Million in SAFT Sale

Blockchain platform provider Kadena has raised $12 million through a Simple Agreement for Future Tokens (SAFT) sale.

Announcing the successful round on Thursday, the startup said that participants included Devonshire Investors, the private investment arm of the owners of Fidelity Investments, as well as SIG, Asimov Investments, Multicoin Capital and SV Angel.

Based on the SAFT framework – a kind of investment contract tht acts as promise for the delivery of tokens at a future date – the round was limited to accredited investors, and comes on the heels of a previous $2.25 million SAFT sale that was announced in January.

The funds will go toward the development of the company’s Chainweb platform, Kadena co-founder Stuart Popejoy told CoinDesk – specifically, to help build out its technical ecosystem.

The firm’s Chainweb protocol aims to use parallel blockchains with shared Merkle roots to tackle scaling and security issues, as previously reported. The different chains can be dedicated to different use cases without congesting the whole network.

However, there are “a bunch of things that have to be in place” before the public protocol will be ready for launch later this year, said Popejoy, who was previously a blockchain developer at JPMorgan Chase.

To that end, Kadena intends to begin releasing tools for the broader community to test, including a formal verification toolkit to help identify bugs, he said.

“Formal verification is something that’s come up at various times in the blockchain discussion, usually after a huge ethereum bug,” he said, noting that smart contracts, in particular, often involve the handling of large sums of money.

Popejoy explained:

“As we can see bugs can have significant impacts. The Parity bug was just a bug … but it allowed people to lose millions of dollars. So what we have is formal verification, and what that does is the computer proves to you mathematically that the network has no bugs.”

Kadena demonstrated a working prototype of the formal verification tool in 2017, but is now preparing to release it to the public for developers to use, Popejoy said.

The Chainweb testnet is set for launch in August, while the full network is slated for release in December, he added.

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JP Morgan Blockchain Spin-Off Kadena Hires New Head of Growth

Blockchain startup Kadena is continuing its expansion plans with the addition of a former Capco innovation lead to its ranks.

Ben Jessel will serve the new head of business growth for Kadena, which announced in January that it had raised $2.25 million during a private-placement SAFT round. The company’s co-founders previously worked within JP Morgan’s Emergent Technologies group, with the startup branching off from that effort.

Jessel is the former head of innovation and blockchain at financial services consulting firm Capital Markets Company (Capco), where he remains an advisor. In an interview with CoinDesk, Jessel said he was bringing a strategic lens to Kadena, adding that “there’s some very exciting technology here … the question is, how do we make this real for clients?”

To that end, Jessel explained that while his focus will be on Kadena’s private blockchain offerings, he is working with the team behind its public Chainweb network, which is expected to launch later this year.

Part of the challenge is in deciding whether Kadena should offer an end-to-end solution product or simply put forward the tools to help its clients develop their own solutions, he said.

To help in solving that puzzle, Kadena offers its clients access to the language behind its blockchain, simplifying the process to add to it.

“One of our beliefs is that organizations are going to require a fast, available public blockchain, and they need a code that can be understood by people within the organization,” he explained.

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JP Morgan Blockchain Spin-Off Raises $2.25 Million

Smart contract startup Kadena has raised $2.25 million in a pre-A financing private-placement SAFT round for its new blockchain project.

According to the startup, Metastable, Kilowatt Capital, Coinfund and Multicoin Capital all invested in Kadena through a private-placement SAFT round.

The funding goes to support Chainweb, a project focused on scaling and security issues and realized through the combination of multiple peer blockchains to process transactions, rather than the use of one single decentralized blockchain like the one that underlies bitcoin, said Kadena co-founder Stuart Popejoy.

By using multiple chains, users can avoid the network issues which plague other public blockchains like bitcoin and ethereum, the former JP Morgan Chase blockchain developer told CoinDesk.

He explained:

“A Cryptokitties-like application can run on five or six chains of its own, while a massive [initial coin offering] can happen on another chain in the network and they won’t slow each other down. And even if you run into an issue where you have congestion, you can provision chains to make up for the load.”

The different chains integrate their Merkle roots with each other, ensuring that while they each act as a unique blockchain, they can still share information and create a consensus among the ledgers.

Unlike other scaling proposals, Chainweb’s parallel network model maintains security without using side channels or only using part of a blockchain to process a large number of transactions. Popejoy said Kadena’s tests found an extremely high level of security with their proposal, which intends to produce roughly 1,000 different chains eventually.

In addition, each chain will produce Kadena’s token, though the exact function that determines how many tokens are released and what timeline they will be released over has not yet been determined, Popejoy said.

That being said, the Chainweb protocol will ensure that the same coin cannot exist on two chains at once.

“It is a single currency, when you want to move coins from one chain to the next it’s a [Simple Payment Verification] so coins are deleted on one chain before being created on the other,” he continued.

The project began as a way to develop better smart contract language for users, Popejoy said. It integrates with Pact, the smart contracts service already offered by Kadena to enterprise customers.

However, Chainweb will go beyond businesses and become a public network, he said.

Using Chainweb’s parallel network model, Kadena hopes to increase volume for a single token up to 10,000 transactions per second while maintaining low transaction fees, according to the press release.

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The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.