Oasis Labs, a startup spun out of UC Berkley that’s building a blockchain-based cloud computing platform intended to rival the likes of Amazon Web Services, raised $45 million from high profile venture firms including a16zcrypto, Accel and Pantera Capital as well as crypto exchange Binance. The move is yet another sign that the next generation of the internet, so called Web 3.0, is being built on the blockchain and the funding keeps pouring in.
What Investors see in Oasis
A few aspects of the Oasis Labs project help set it apart from other blockchain projects hoping to be the next big thing:
- Privacy-focused smart contracts
- Separation of computation and consensus layers allowing the two to operate in parallel, which allows for better scalability
- A highly decorated team of academics in the field of computer security with industry and startup experience
What is a Smart Contract?
Smart contracts are one of the most important ways in which blockchain can help to rewrite the rules of our digital ecosystem as we know it.
So what is a smart contract? When the rules of a contract between two parties are codified into a digital form where the ‘promises’ between the parties involved are governed and enforced by a protocol.
The concept was best defined by Nick Szabo in his article from 1995, more than a decade ahead of the advent of Bitcoin in 2009. But has since been moved forward by leading cryptocurrency based platforms, most notably Ethereum. Competition in crypto smart contract platforms is fierce as Ethereum competitors such as EOS join the fray.
Most smart contract platforms face problems with privacy and scalability at the moment. Smart contract platforms like Ethereum require all transactions and each change in the contract status to be published on every node of the public blockchain. This fact prevents or at least makes prohibitively expensive certain use cases where the parties involved may wish to keep the inner workings private or where the transitions of the contract require complicated computations.
Although Ethereum is working on solutions to these challenges such as Zero Knowledge Proofs and off-chain computation like TrueBit, there is no certainty that these solutions will deliver on the potential of smart contracts.
This is where Oasis comes in. The Oasis solution is to combine other open source technology the team worked on in the past to provide both scalability and privacy to smart contracts.
Part of the technology is inspired by work on differential privacy technology, currently in use by Uber, which uses mathematical techniques to vary how much individual information is revealed by queries depending on the potential for privacy invasion.
The Oasis team is also planning to incorporate aspects of research done on the open-source hardware technology Keystone, which builds “trusted execution environments” (TEE) within hardware that could be used to protect privacy focused smart contract transactions.
Finally, the Oasis project will also utilize concepts described in the Ekiden white paper which identifies how the aforementioned differential privacy and TEE technologies will be combined into a protocol that separates smart contract computation from consensus.
These technologies will be ideal for a cloud computing platform where applications can be hosted using smart contracts and can be scaled thanks to computational efficiencies while still remaining private and decentralized. Combining all of these technologies into one, Oasis has the potential to be the Web 3.0 version of popular and profitable cloud computing solutions like AWS and Azure.
Each of these technological solutions is complicated on its own and to combine them into a blockchain based platform adds even more complication to the project. However, the team behind Oasis has serious bona fides when it comes to computer security and computer science.
Led by University of Berkeley Professor Dawn Song, CEO of Oasis, the team consists of academics who have either gone through an exit at a previous startup or had their research put into commercial production. Song herself is very well regarded in the security industry, won some high profile awards, and has been featured in an impressive list of publications.
Crypto Focused Funds Leading the Charge
The raise by Oasis represents one of the earliest investments for a16zcrypto, Andreessen Horowitz’ $300 million crypto-focused venture fund. The fund, headed by Chris Dixon, was set up to focus on crypto-related companies and protocols. In an excellent podcast, Dixon laid out his vision for the future of the space:
In addition to a16zcrypto, others participating in the Oasis raise have plenty of credibility in the blockchain and crypto ecosystem.
Accel, whose investments include internet heavyweights such as Facebook, Dropbox, Slack, and Spotify has also been exploring the blockchain space with its participation in Circle Internet Financial’s Series A funding round.
Pantera Capital, which invests in blockchain projects through it’s two venture funds as well as runs four cryptocurrency funds, has been participating in the ecosystem since 2013.
Others investing in Oasis include crypto exchange Binance and Fred Ehrsam, co-founder of Coinbase. The involvement of exchanges in more traditional funding (i.e. not ICO), is another sign of crypto’s broadening ecosystem.
Exchanges could have a vested interest in new token listings and would make serious fees from transactions that ICOs typically generate. They too see benefit in the venture-based funding model that typically gives investors more influence over the projects.
Blockchain and Web 3.0
As more and more blockchain projects get off the ground and the serious money continues to flow into the space, it’s clear that the aim of the crypto and blockchain participants is to reinvent the internet as we know it.
The internet was born out of a concept of democratizing information and huge strides have been made in this area.
However, despite the internet’s open standards in the beginning, it has developed for the most part into a gated community where the gatekeepers may let everyone in but are still able to control the value of the information created.
While decentralized systems like the one proposed by Oasis aspire to change the game and create a Web 3.0 platform that provides democratization of information AND value, there’s still a long road ahead. The so-far steady hands from venture-backed investment in blockchain and crypto seem to be singing the same song for now.