Solana RPC Provider RunNode Closes $8.1m Seed Round — Aiming To Fix Major Solana Bottleneck

Forbes

The primary markets for crypto-related fundraising rounds are as hot as ever, with the rise of layer one “Ethereum competitors” leading to a massive influx of new infrastructure concerns that projects are trying to solve.

Solana, out of all the layer one projects, has perhaps seen the most meteoric growth throughout 2021, offering users cheap and fast transactions as well as a host of lucrative liquidity opportunities and on-chain products for users to tap into.

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Solana has had its fair share of growing pains, however, and some have yet to be solved.

One such problem is relating to the network’s uneconomical RPC nodes. The high costs and low return of running these has led to a shortage, forcing projects to pay massive premiums to tap into Solana RPC nodes.

RunNode is an infrastructure layer that connects Web 2.0 (the internet as we know it) to Web 3.0. The biggest differentiator between RunNode and its competitors is its focus on ease of use, security and cost optimization.

The applications of web 3.0 are known as dApps, or decentralized applications. These decentralized applications communicate to the blockchain through the middle layer, known as the RPC (remote procedure call) layer. The RUN token will act as an authenticator on-chain to verify request limits and allow for developers to access RPC services through a smart contract.

Currently, it takes less than 30 seconds to sign up for an RPC endpoint through RunNode and enterprise projects are saving an average of 20% off their monthly spend per month after switching from some of the other competitors.

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Beyond their RPC service, there are plans to build a robust staking pool with strong incentives for users with a liquid staking open that connects into current staking pool providers to help Solana achieve a more decentralized blockchain.

The project just closed an impressive $8.1m fundraising round at a $30m valuation led by the investing powerhouse Alameda Research Ventures, highlighting the massive demand for better infrastructure projects within the burgeoning Solana ecosystem.

In addition to Alameda, the seed round garnered support from other notable names including Serum, ByBit’s Mirana Ventures, Spartan Group, Epsilon Trading, RareStone Capital, and DAOJones (an investment DAO led by Meltem Demirors among other notable names).

To establish long-term alignments with the Solana-ecosystem, RunNode has onboarded Nate Park, the CTO of Alameda Research, and Michael Burgess, Head of Partnerships at FTX as advisors. 

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Unlike some of its competitors, they have chosen to focus solely on the Solana network instead of taking a cross-chain approach to the problem. By doing this, they want to become experts at Solana so they’re also able to help projects optimize their code.

The Solana team hasn’t shied away from addressing the RPC endpoint bottleneck that is currently plaguing the network, with the project’s co-founder Anatoly Yakovenko speaking on the topic in a call with the RunNode team:

“The thing I’m most concerned about is how easy and fast a developer can click to get access to good infrastructure for their project. That was a serious issue during our hackathon event.”

The success of RunNode’s fundraising round highlights a trend within the sector revolving around investors favoring infrastructure projects versus betting on more niche protocols aiming to gain market fit in a single product sector.

Amy Wu — a partner at Lightspeed — spoke about this trend in a recent tweet, noting that infrastructure will be one of the next big categories within the decentralized finance sector and broader crypto market.

“In the next 2 yrs, infra/dev ops/security will be a big category after DeFi, Web3, and NFTs. Blockchain congestion will continue, developer experiences will transform, as it has in Web2. Barriers of entry are higher than in consumer in both product and ideology.”

Long-term RunNode has plans to convert into a DAO (a decentralized autonomous organization) that revolves around an incentivized economy around running RPC nodes where you can earn RUN tokens by providing server power to applications being built on Solana. 

The RUN token is launching in the coming weeks via a dual-IDO on Raydium and Solstarter.

Post-launch, users will be able to stake their RUN tokens to earn rewards and gain access to a whole host of other benefits, including whitelists for NFT mint launches from projects using their RPC infrastructure, participate in DAO governance, access RPC on-chain and RUN holders may also receive regular airdrops from Solana projects looking to grow their communities.

Follow RunNode on Twitter for more updates regarding the RUN token launch and the project’s progression.

Meet the Authors

Joseph Young is a cryptocurrency analyst who has been in the space since 2014. He contributes to Forbes, CoinTelegraph, and a host of other top crypto news sites. Over his 6+ years in the space, he has built countless connections with industry leaders and has amassed over 150,000 followers on Twitter.

Nick Chong is a passionate crypto researcher specializing in identifying and extracting conclusions from trends within the rapidly emerging DeFi space. He has been involved in the crypto markets since 2016, and sources deals for ParaFi Capital—a DeFi-focused hedge fund.

Cole Petersen first learned about Bitcoin in 2013 and began working in the space in 2017. While on a gap year as a student at the University of California, Irvine, he is now a managing partner at a crypto-asset venture fund and previously worked as an associate at BlockVenture Coalition.

[Disclosure: Members of the Alpha Alarm team have exposure to some of the projects mentioned in this report. It is not a considerable percentage of any of the team members’ portfolios. None of this newsletter should be construed as financial advice or an endorsement to use or invest in a specific crypto-asset or crypto-asset protocol.]

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Author: Cole Petersen, Contributor


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