Space and Time, a decentralized data warehouse for blockchain applications, raised $10 million in a seed funding round that was led by crypto investment firm Framework Ventures.
The funds will primarily go toward hiring engineers and building out the platform, Space and Time co-founder and CEO Nate Holiday told CoinDesk in an interview.
Space and Time is developing a novel cryptographic protocol called proof-of-SQL, referring to the structured query language programming used to manage and interact with databases. The protocol would allow blockchain applications to rapidly generate analytical insights in a decentralized, low-cost and secure way.
How it works
Space and Time, which started as part of a Chainlink Labs program that supports the development of Web3 startups, uses Chainlink and other sources to pull data from blockchains, decentralized applications and off-chain systems. It’s database processes the data off-chain, avoiding high transaction or gas fees and slow throughput, and then transmits the data to a validation layer to be verified. The validated data is sent back on-chain to smart contracts, which is where the blockchain application that requested the data can see the results.
"A key issue with decentralized applications is having to work with centralized databases that have the ability to tamper with data," Holiday said. "Users can see data coming in but cannot tell if anyone has added information to that data, which could be done in a malicious way. The proof-of-SQL model would show users evidence of any tampering, such as if someone changed the query results in the middle of the query," he added.
Can the end user see the sources of the data in the Space and Time databases?
“We allow the operators of the data to determine what should be encrypted and what shouldn’t,” Holiday explained, using sensitive financial information as an example. ”We’re going to incentivize projects to share their data and to have an open data policy. Whether they have an open data policy or not, we can cryptographically guarantee that the data isn’t tampered with.”
Apart from Framework, which has $1.4 billion in assets under management, other participants in the round included CoinDesk's parent company Digital Currency Group, Stratos, Samsung Next, IOSG Ventures, Alliance Ventures and others.
Space and Time plans to release the test version of its platform (or testnet) around April 2023 with plans for the mainnet to follow in September of next year. The platform will be connected to major blockchains, including Ethereum, Binance and Polygon.
Holiday noted that games would probably be the first use of the technology, but future Web3 use cases could include social networks, communications or enterprise resource planning. The off-chain processing would ease the currently “untenable” costs of fully on-chain operations.
“If it costs $5 to put out a tweet on a decentralized Twitter application, no one’s going to use it,” Framework co-founder Michael Anderson said. “But if you have the ability to store it securely and very cheaply, that’s something that does enable this new application category.”
Venture capital investments in crypto companies were down 26% year-over-year in the first half of 2022 as the bear market emerged.
Asked if Framework has changed its investment strategy because of the bear market, Anderson noted that the firm was started in 2019, which was “sort of the depths of the bear market in that cycle.”
“We feel like we thrive in bear markets because we get to hone in on the core use cases and the best builders,” he said. “Our thesis really hasn’t changed at all. We just now have more time to focus on the things that matter.”
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.