Squads Labs Secures $5.7 Million in Funding
Investment firm Multicoin Capital has announced a new funding round for Squads Labs, providing $5.7 million in investment. This brings the total funding for Squads to $12.5 million, a significant milestone for the company behind the Squads Protocol on the Solana blockchain. Multicoin Capital has been an investor in Squads since late 2021, indicating a growing relationship between the two entities.
Developing Smart Contract Wallet Infrastructure
Squads Labs is at the forefront of developing smart contract wallet infrastructure and other products that simplify self-custody on a larger scale. One of their key products is “Squads,” a multisig standard for Solana that helps teams and developers manage treasuries, programs, tokens, and validators. They also offer “Fuse,” a wallet for secure individual interactions with Solana dapps and protocols using multisig safety. Their open-sourced and audited Squads Protocol serves as a foundational smart contract wallet infrastructure layer for the Solana blockchain, promoting collaboration in building self-custody products.
The Evolution of Asset Custody
Asset custody has been a concern throughout history, with businesses traditionally relying on banks for security. However, modern banking structures are not immune to risks, as demonstrated by recent collapses and complications in the financial sector’s clearing and settlement process. The creation of the Depository Trust & Clearing Corporation (DTCC) digitized securities and centralized clearing and settlement services but faced challenges with settlement timeframes. Following the 2008 financial crisis, custodian bank consolidation occurred under regulatory scrutiny, resulting in four major custodian banks holding $136.6 trillion in assets under custody as of June 2022.
The Promise of Blockchain Custody
Blockchains offer a promising solution to the challenges of asset custody by combining digitization with bearer instruments. This innovation enables real-time global settlement and reduces counterparty risks, laying the groundwork for tokenizing real-world assets. Currently, there are over $1 billion in notional private credit and US treasuries onchain, showcasing the potential of blockchain custody.
The Shift towards Multi-Signature Wallets
To address the challenges of self-custodianship in blockchain, there is a need for a shift towards multi-signature wallets where multiple parties share authority in managing assets. Squads emerged as a pioneering multisig solution in the Solana ecosystem, with over 100 teams using Squads for asset coordination valued at around $500 million. With a proven track record, independent audits, and formal verification, Squads provides a robust platform for institutional investors and internet-native organizations.
Squads Unveils Major Platform Upgrades
Squads recently announced significant platform upgrades, including SquadsX (Solana’s first multisig browser extension wallet) and Squads (v4), an audited protocol upgrade scheduled for immutability by November end. These upgrades introduce enhanced security features, roles and permissions, fee relay, mass payouts, and expanded transaction complexity, laying the foundation for blockchain-native custody infrastructure.
A Beacon of Crypto Adoption Simplification
The Squads initiative aims to simplify crypto adoption and offers enterprise and institutional-grade products. Over the past 18 months, the Squads team has demonstrated dedication and execution, with the backing of Multicoin Capital amplifying their potential to redefine internet-native infrastructure for self-custody and on-chain capital coordination.
Hot Take: Transforming Asset Custody with Blockchain Technology
Blockchain technology has the potential to revolutionize asset custody by providing secure, real-time global settlement and reducing counterparty risks. Squads Labs, with its multisig solutions and smart contract wallet infrastructure, is at the forefront of this transformation. Their recent funding round and platform upgrades further solidify their position in the industry, attracting institutional investors and internet-native organizations. As blockchain custody becomes more widely adopted, traditional custodian banks may face increased competition from innovative solutions like Squads, paving the way for a new era of self-custody and on-chain capital coordination.
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