Ethereum scaling solution Nahmii is being backed by DARMA Capital, the U.S.-registered investment fund launched by former ConsenSys veterans Andrew Keys and James Slazas.
Announced Tuesday, DARMA is leading a $3 million seed round in NiiFi, a decentralized exchange (DEX) being built on Nahmii – a layer two system for boosting Ethereum’s transaction capacity. Also included in the round are A195 Capital, AU21 Capital, Blocksync Ventures, Lotus Capital, Matterblock, Moonwhale Ventures, Protocol Ventures and Three M Capital.
The NiiFi DEX promises institution-friendly features like instant settlement finality and know-your-customer (KYC) capabilities, DARMA Capital said.
“Nahmii is where DARMA is placing its layer two scaling-solution bet,” Keys said in an interview. “We are concerned with commercial viability, and one of the most important considerations when employing blockchains is finality. NiFii uses Nahmii’s scaling capabilities to build a commercially viable DEX with instant, immediate finality, and we think that will be a huge differentiating point.”
Ethereum scaling solutions that run tangentially to the main Ethereum chain are hot property right now, with the likes of Polygon making a splash and Optimism, another popular option, soon to go live in full.
Generally speaking, blockchains achieve what’s known as probabilistic finality; it takes a period of time for a bitcoin transaction to settle in the blockchain, for instance (though some might argue that for any financial system, finality is always probabilistic).
Scaling solutions like Optimism, known collectively as rollups, gather an off-chain aggregation of transactions inside an Ethereum smart contract that will settle to the main chain at some future point. In the case of Optimism, settlement finality is going to be seven days, said DARMA’s Keys.
“We have basically built a system from the ground up with our own IP, which is actually currently patent-pending,” said Nahmii developer Jacobo Toll-Messia in an interview.
The current raise is particularly around building out NiiFi’s low latency DEX with instant finality and anti-money laundering and KYC for DeFi, said Keys, with some more fundraising to follow shortly.
“We plan to announce a larger capital raise for Nahmii layer 2 in a month or two,” he said.