Luxembourg-based venture capital firm NextBlock has funded the entire $3 million seed round of Soda Labs, backing a privacy infrastructure company that is looking to expand its technology across some of the largest public blockchain ecosystems.
Unlike many early-stage blockchain infrastructure projects, Soda is entering its next phase with technology already being used onchain. Its privacy infrastructure has processed more than 100 million transactions on the COTI network and supports deployed applications including perpetuals exchange PriveX and tokenization platform Zoniqx.
PriveX has processed more than $20 billion in trading volume, while Zoniqx is onboarding issuers across multiple asset classes and jurisdictions.
For NextBlock, that existing activity was an important part of the decision to invest.
“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.”
The technology addresses a problem that becomes increasingly relevant as more financial activity moves onto public blockchains: transparency is one of their defining characteristics, but banks, payment companies and other financial organizations cannot necessarily expose the data behind every transaction or computation.
Soda’s approach is designed to introduce privacy without requiring that activity to leave existing public blockchain infrastructure.
Over the past two and a half years, the company has developed a cryptographic privacy solution combining garbled circuits with multiparty computation, or GC-MPC. The system relies on established cryptography such as AES and SHA256 and runs on standard cloud CPUs without specialized hardware.
Soda is now taking that technology beyond gcEVM, its Ethereum Layer 2 privacy layer that remains live on COTI.
Its next architecture, Soda Bubble, is designed as a chain-agnostic coprocessor capable of processing developer-defined private workloads originating from different blockchains. The underlying private data is not exposed publicly or to Soda Labs itself.
Bubble is going live across Ethereum, Polygon, Arbitrum and Base, while expansion to non-EVM networks including Solana is also underway.
The company is also expanding the Bubble Validator Network, which enables participants to mathematically verify that computations involving private data have been performed faithfully.
Privacy also needs to perform
The ability to keep information private is only one part of Soda’s proposition. The company is also focusing on the performance and cost of running private computation at scale.
Soda expects to publish new performance benchmarks in the coming weeks following testing on Arbitrum.
According to the company, the tests measure the complete transaction lifecycle on the live network, including encryption, MPC computation, consensus and settlement, rather than measuring only the cryptographic operation itself.
Soda says the results represent a five- to tenfold improvement over its previously published benchmark. It 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 than currently available alternatives, while operating on standard cloud CPUs.
The latest benchmark results have not yet been publicly released.
The company is targeting financial use cases including payments and stablecoins, institutional DeFi, tokenization, asset management and banking infrastructure.
“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.”
Soda is already working with financial and infrastructure organizations on several undisclosed pilots, with the objective of converting them into production deployments.
The new capital will be used to support that transition, including Soda’s go-to-market strategy, expansion of its validator network and blockchain coverage, team growth and integrations with banks, payment companies, tokenization platforms and other financial infrastructure providers.
Soda Labs was founded by Avishay Yanai, CEO and PhD in cryptography, and Meital Levy, CTO and PhD in algorithms. Together, the founders bring more than 20 years of experience in security.
For NextBlock, the $3 million round gives Soda additional resources to move from an existing privacy deployment on COTI toward a broader infrastructure layer spanning multiple public blockchain networks, with financial institutions among the primary targets for adoption.
