Blockchain business Essential announced that it had bagged $11 million in Series A funding, headed by Archetype, and included participation from multiple other prominent investors. Surprisingly, this comes at a time when funding in crypto and blockchain companies has taken a hit this quarter.
Essential to provide “intent-centric” service
The goal of Essential is to provide a “declarative, intent-centric approach” with the current funding. According to a statement , this differs from standard blockchain because it uses users’ “intents” for desired outcomes instead of typical transaction-based interactions where users must express precise instructions.
To minimize on-chain computing, these intentions are subsequently handled off-chain by a network of solvers, allowing consumers to remain detached from the detailed “how-to” portion of a transaction.
Essential is a blockchain business creating an Optimistic roll-up of a declarative or intent-centric Ethereum Layer 2 network. The ecosystem uses an intent-based paradigm instead of standard blockchains, which use a transaction-based model (where users describe the desired outcome).
Essential is a Layer 2 that manages user intents off-chain by employing “specialized solvers” to improve efficiency. This strategy aims to increase scalability, decrease on-chain effort, and improve user experience.
Essential’s capital raise comes as funding in sector takes a hit
Essential’s current announcement on the capital raise comes at a time when the broader blockchain and crypto market has seen a slump in the total number of deals closed.
As Bankless Times reported previously, in the three months that ended in June, $2.7 billion in venture capital was invested in cryptocurrency firms. This is a decrease of 9.8% from the same period last year and a rise of 2.5% from the first quarter. Deals that were closed were 12.5% fewer than in the first quarter.
The cryptocurrency market reached record highs in the first quarter due to the enthusiasm surrounding the first-ever approval for US exchange-traded funds to hold Bitcoin. But things got harder for the market in the next phase. Investor inflows into the ETFs dropped by 80% from $13.7 billion in the prior quarter to $2.8 billion in the second quarter.
Essential’s today’s announcement might be a reminder for the grater crypto world that the sector is yet to see its brightest days.
