Blockchain project Espresso Systems has completed a $28 million Series B funding round led by a16z crypto.
After raising a $30 million Series A round in 2022 and $2 million in seed funding in 2020, the latest round brings Espresso's total funding to over $60 million. The company did not disclose the latest valuation.
Espresso said the round opened for negotiations in early Q4 2023 and closed in early 2024 at a16z. This project is currently being prepared for completion with additional strategic investors.
Espresso is building a market for shared sequences, allowing rollups to auction the right to build blocks. According to Espresso, this setup facilitates interoperability between rollups and provides an opportunity for various parties to participate, including layer 1 block proponents (such as Ethereum).
“Anyone can participate in this marketplace, including L1 proposers and rollups themselves. Rollup companies that don’t want to worry about order can maintain their sovereignty while being fully compensated for the value they create. We can rely completely on Espresso with confidence that we will continue to grow,” CEO Ben Fish told The Block.
What is the Shared Sequences Marketplace?
A shared sequencer is a party or protocol that produces blocks of multiple rollups simultaneously. This setup of the marketplace allows rollups to sell shared sequence rights to third-party bidders on a per-timeslot basis.
Espresso is creating a marketplace where rollups can specify a default sequencer and set a floor price for transferring sequence rights from the default sequencer to an external entity. If Rollup doesn't want to manage the sequence, Fish explained that the marketplace can manage the sequence for them.
“Espresso's evolution from a single decentralized shared sequencer to a marketplace for shared sequencing is critical to rollup sovereignty and value capture,” said Ben Fish.
Ultimately, Espresso aims to allow rollup users to have an experience similar to being on one Ethereum chain with increased configurability. All of this, according to the project, is simultaneously turning the project into a decentralized marketplace for shared sequences that maintains the sovereignty and value capture of individual rollups.
Espresso also integrates a finality tool called HotShot, which ensures quick finalization of blocks. In other words, HotShot acts as a consensus protocol for Espresso's shared sequencer ecosystem. The project also operates a data availability layer for sovereign rollups called Tiramisu.
“Espresso brings faster shared confirmation of transactions for all integrated rollups. This significantly reduces risk for cross-chain liquidity providers, among other benefits, and rollups It allows for faster bridging between the two,” Fish added.
In April, Espresso will release its fifth testnet, Cappuccino. Compared to the current testnet, Cappuccino will be more decentralized, include various enhancements, and prepare for the launch of the Espresso marketplace. The team is targeting a mainnet launch in late 2024.
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