NextBlock is putting $3 million behind an increasingly important challenge for public blockchains: how to give financial institutions privacy without forcing them to move their activity onto separate, purpose-built networks.
The Luxembourg-based venture capital firm has funded Soda Labs’ entire seed round. It is backing the company’s programmable privacy infrastructure for financial activity on public blockchains.
Soda Labs has spent the past two and a half years developing a cryptographic privacy system. It combines garbled circuits with multiparty computation, or GC-MPC. It relies on established cryptography including AES and SHA256 and runs on ordinary cloud CPUs rather than specialized hardware.
The technology is designed to enable private computation while applications remain connected to existing public blockchain infrastructure. That addresses a fundamental problem for banks, payment companies and other financial institutions. Public blockchains may offer liquidity and users, but financial data cannot always be visible to everyone.
“What attracted us to Soda was not only the underlying cryptography, but the practicality of the technology for the financial workloads we believe will matter most onchain,” said Pieter van Poecke, Founder and General Partner of NextBlock. “Soda already had a working product and paying customers. We believe its differentiated technical IP, deeply technical founding team and strong commercial instincts give the company a compelling foundation for its next phase.”
Soda’s technology has already processed more than 100 million transactions on the COTI network. There, it supports applications including tokenization platform Zoniqx and perpetuals exchange PriveX. PriveX has processed more than $20 billion in trading volume. Zoniqx is onboarding issuers across multiple asset classes and jurisdictions.
Keeping private finance on public chains
Soda is now extending its architecture beyond gcEVM, its Ethereum Layer 2 privacy layer that remains live on COTI. The next step is Soda Bubble, a chain-agnostic coprocessor for programmable privacy.
Bubble is designed to process developer-defined workloads originating from different blockchains. It does so without exposing the underlying private data publicly or to Soda Labs itself.
The company is expanding the system across major EVM ecosystems including Ethereum, Polygon, Arbitrum and Base. Expansion to non-EVM networks, including Solana, is also underway.
Its Bubble Validator Network enables participants to mathematically verify that computations involving private data have been performed faithfully.
For NextBlock, the investment reflects a focus on infrastructure that could make privacy-preserving computation practical for real financial applications. It does so without removing that activity from existing public blockchain ecosystems.
Making privacy faster and cheaper
Soda Labs expects to publish updated performance benchmarks in the coming weeks based on testing conducted on Arbitrum.
The company says the tests measure the complete transaction lifecycle on the live network. That includes encryption, MPC computation, consensus and settlement. They do not measure the cryptographic operation in isolation.
According to Soda, the results represent a five- to tenfold improvement over its previously published benchmark.
The company also reports that its garbled-circuit MPC architecture can deliver approximately 10 to 100 times greater throughput and 100 to 1,000 times lower cost per transaction. That is compared with currently available alternatives, while operating on standard cloud CPUs. Soda has not yet publicly released the new benchmark results.
“Public blockchains already have the liquidity, users and financial applications. What they lack is a way for regulated money to move without showing everyone everything,” said Avishay Yanai, Co-Founder and CEO of Soda Labs. “Bubble gives banks, payment companies and tokenization platforms privacy with controlled disclosure, on the chains they already use. This round lets us take it from pilots to production.”
From pilots to production
The $3 million will support Soda Labs’ go-to-market strategy, expansion of its validator network and blockchain coverage, and team growth. It will also fund integrations with banks, payment companies, tokenization platforms and other financial infrastructure providers.
Avishay Yanai, CEO and PhD in cryptography, and Meital Levy, CTO and PhD in algorithms, founded the company. Together they bring more than 20 years of experience in security.
For NextBlock, the investment puts capital behind a simple thesis: public blockchains already have the financial activity. The next challenge is making that activity private enough for regulated finance.