Ethereum’s Dencun upgrade, the network’s most consequential since the 2022 Merge, went off without a hitch last week, reducing gas fees on many layer-2s to a couple of cents. 



A week later, Ethereum’s layer-2 ecosystem has become a focus of funding announcements.



The layer-2 infrastructure startup Espresso announced $28 million in Series B funding led by a16z crypto on Thursday. Various layer-2-related firms participated, including Polygon, StarkWare, and Arbitrum developer Offchain Labs.



Read more: Espresso lands $28M to become marketplace for shared sequencing



Espresso is largely known for building a shared sequencer for layer-2s, where rollups can order and process transactions via a shared marketplace, rather than in their own execution environments. This could theoretically make layer-2s more interoperable, though the program is still in testnet. 



“At its core, crypto is a technology movement that builds tools for better human cooperation at a larger scale—especially when the cooperating parties mutually distrust one another. Espresso and Ethereum are the perfect embodiment of that ideal,” a16z general partner Ali Yahya wrote in a blog post. 



The funding follows on $32 million Espresso raised led by Greylock Partners and Electric Capital in 2022. 



Read more: Espresso Sequencer’s fourth testnet launch integrates with Arbitrum



Two layer-2s also announced noteworthy raises. 



Morph raised $20 million in seed funding led by Dragonfly. Co-founded by Cecilia Hsueh, formerly of derivatives exchange Phemex, and Azeem Khan, previously at Gitcoin, Morph brands itself as a consumer-centric blockchain. Pantera, Foresight Ventures, and The Spartan Group were among other investors in the layer-2, which is also still in testnet. 



The developer behind privacy-focused layer-2 TEN, short for the encrypted network, raised $9 million led by R3, The Block reported . 



Derivatives exchanges



As crypto prices rise, derivatives exchanges where traders can speculate on future crypto asset prices are becoming more popular. 



Rails came out of stealth with $6.2 million in seed funding this week for a self-custody-focused perpetuals exchange. The round saw participation from Slow Ventures, Round13 Capital, CMCC Global, and Quantstamp. Two of the project’s three co-founders previously held leadership positions at the LGBTQ dating app Grindr. 



Institution-focused derivatives infrastructure startup Kemet also announced $5 million in funding led by Further Ventures. 



Further said it felt Kemet is offering the “first true institutional single-access point into the digital asset derivative ecosystem” in a blog post announcing its investment. 



Other notable fundraises




Zero-knowledge infrastructure developer Succinct announced a $55 million Series A led by Paradigm.  



Limited partners at a16z will be able to invest in the VC’s crypto seed and venture verticals through a new general fund Andreessen is raising called Multiplexer, The Information reported . 



Real world asset tokenization startup MANTRA raised $11 million led by MENA-based Shorooq Partners. 



Sonarverse secured $7 million in funding led by BlockTower Capital for an on-chain data platform aimed at institutional investors.








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