Conflux, a blockchain protocol designed for decentralized applications (DApps) that promises much higher capabilities in terms of scalability and speed, has raised US$35 million from prominent investors and some of China’s biggest tech firms.
Investors in the round include Metastable, the cryptocurrency hedge fund co-founded in 2014 by Angellist’s CEO Naval Ravikant, Sequoia China, IMO Ventures, FreesFund, Rong 360, Shunwei Capital, F2Pool, Huobi and Nirvana Capital.
Rong 360 and Huobi have committed to developing DApps on the Conflux protocol and the startup also signed a memorandum of understanding with South Beacon which plans to use the Conflux blockchain to provide greater transparency to its ride sharing business and customers, Conflux said on Tuesday.
Commenting on his firm’s investment in Conflux, Haseeb Qureshi, general partner at Metastable, said:
“Conflux introduces the first decentralized platform that we believe is poised to be the protocol supporting the next wave of apps from China’s leading tech companies and startups, and we’re excited to be a part of Conflux’s journey.”
Conflux, which is targeted at large firms and tech giants, claims to be the first fully decentralized DApp-ready proof-of-work (PoW) protocol that’s capable of processing up to 6,000 transactions per second while supporting at least 20,000 nodes.
It intends to solve the long-standing scaling issue inherent to protocols such as Bitcoin and Ethereum, which can only process about 7 and 30 transactions per second respectively and fail to respond to the needs of large-scale DApps.
In a decentralized blockchain system, transactions need to be confirmed by the whole network, which takes much longer than in centralized services such as the Visa network. Conflux says its protocol can confirm transactions in about 10 minutes even at over 3,000 TPS on average, a huge improvement compared to Bitcoin and Ethereum.
The system relies on a novel Directed Acyclic Graph (DAG)-based ledger structure together with an optimistic concurrency control to achieve a consistent order of transactions among all the nodes in the network.
While blockchain protocols like Bitcoin only allow a single block at one time onto a single chain, Conflux can accept multiple concurrent blocks at the same time from any node. The system records information about two kinds of relationships between blocks, parent-child relationships and generate-before relationships. The concurrent blocks are later counted and converged into one final chain, which consequently could be visualized more like a network of blocks, less a chain of blocks.
“Imagine developing DApps on a fully decentralized protocol like Bitcoin, with the scalability of centralized platforms,” said Fan Long, co-founder of the Conflux Foundation, the organization that’s developing the protocol. “Until Conflux, many would argue that it wasn’t possible. Conflux solves the traditional consensus bottleneck that proof-of-work blockchains, like Bitcoin, have been stymied by.”
“Conflux’s main idea is how to make the whole blockchain scalable. We’ve changed the structure of the blockchain so that it’s no longer a chain in the sense that it records each block based on what its parent block says,” Long told Fortune.
Conflux was developed based on published research conducted and produced by the startup’s founders at the Institute of Interdisciplinary Information Science (IIIS), Tsinghua University, the University of Toronto and Alt-chain Technologies. It counts amongst its founders Andrew Yao, recipient of the Turing Award in 2000 for his contribution to the theory of computation, who serves as chief scientist at the startup.
Conflux plans to release its public testnet by the end of February 2019 and the main network by the third quarter of next year.