Chain Reaction, a Tel Aviv-based blockchain startup, recently announced that it raised $70 million as part of its Series C funding round. The funding round was led by Morgan Creek Digital, a VC company co-founded by crypto influencer Anthony “Pomp” Pompliano, and also saw the participation of Hanaco Ventures, Jerusalem Venture Partners, KCK Capital, Exor, Atreides Management, and Blue Run Ventures.
The objective of the funding is to expand the company’s engineering staff to accelerate the production of its blockchain-focused silicon and collaborate in the development of its cryptographic-focused chips. Chain Reaction plans to increase its engineering headcount in order to hasten the development of its blockchain silicon products, which are estimated to reach the market later this year.
According to the company’s co-founder and CEO, Alon Webman, the mass production of the first batch of chips, called “Electrum,” will begin in Q1 2023. Electrum is a highly efficient ASIC chip designed for bitcoin mining, a field currently dominated by companies such as Bitmain. To mass-produce the chips, the fabless startup has enlisted the services of TSMC, one of the biggest foundries in Taiwan.
While the company did not disclose its valuation, Techcrunch estimates it to be around $500 million, having raised $115 million since its founding.
Blockchain Chips and Homomorphic Encryption
Chain Reaction aims to use its first batch of blockchain chips as a stepping stone to developing more advanced silicon, designed to tackle cryptographic problems. The company plans to center more advanced chips around a technique called homomorphic encryption. This technique allegedly allows for operations with encrypted data without having to decrypt it in the first place, thus enabling more efficient and private operations when working with data.
Homomorphic encryption has several potential applications in the cryptography field. Working with encrypted data allows for the protection of sensitive information while still allowing for computations to be performed on it. It could be particularly useful in industries such as healthcare and finance, where data privacy is paramount.
The company is optimistic about having a solution for this cryptographic issue, even with today’s limited processing capabilities. Chain Reaction’s CEO, Alon Webman, believes that their unique architecture and understanding of the limitations on computing and memory among processors today will enable them to make homomorphic encryption viable. Chain Reaction expects to launch these chips sometime at the end of 2024.
In conclusion, Chain Reaction’s successful Series C funding round and its development of advanced silicon chips that utilize homomorphic encryption could potentially revolutionize the blockchain and cryptography industries. With their focus on privacy and efficiency, Chain Reaction may be paving the way for a more secure and private future.