Author:Bryan
Source: Web3 Workshop
As the global demand for decentralization continues to grow, Israel's Web3 sector will continue to attract more investment and entrepreneurs, becoming one of the world's leading Web3 innovation centers.
Israel is slowly turning into a Web3 startup nation, with hundreds of new jobs already being created within the country’s growing blockchain ecosystem.
Israel’s vibrant entrepreneurial scene has made it the startup capital of the world, with 97 unicorns (private companies valued at more than $100 million) and the highest density of startups per capita. In 2021, more than $2.5 billion was invested in Israeli startups, a record number for the country.
Israel has the deepest tech talent pool, a vibrant startup culture, and top-notch venture capital firms – making it an ideal destination for blockchain innovation, with huge potential for future development in Israel’s Web3 sector.
In addition, the Israeli government is also actively promoting digital transformation and supporting the development of blockchain and cryptocurrency. As the global demand for decentralization continues to grow, Israel's Web3 sector will continue to attract more investment and entrepreneurs and become one of the world's leading Web3 innovation centers.
What surprised me most is that Israel has well-known cryptographers such as Eli Ben Sasson, Shaffi Goldwasser, Yehuda Lindell, Aviv Zohar, Eran Tromer, and they are important promoters of revolutionary technologies such as MPC and ZKP.
The following figure is a map of Israel's Web3 project ecosystem. Next, the author will select three of the most representative Web3 companies from it to let readers get familiar with this Web3 technology powerhouse that cannot be underestimated.
1 Fireblocks: One of Israel’s most valuable blockchain security companies
Fireblocks was founded in 2018, and its core technology products mainly consist of Fireblocks Networks and MPC-based wallet infrastructure.
Fireblocks is a platform for protecting digital assets in transit, focusing on protecting the security of customers' digital assets on exchanges, over-the-counter brokers, and during transmission transfers.
Fireblocks enables banks, fintech firms, exchanges, liquidity providers, OTCs, and hedge funds to securely manage digital assets across a wide range of products and services.
Between 2018 and 2019, Israeli security engineer Michael Shauolov co-founded Fireblocks with Idan Ofrat and Pavel Berengoltz, with Shauolov serving as CEO. Over the past 20 years, the three founders have been active in the field of cybersecurity.
Prior to joining Fireblocks, Michael Shauolov co-founded Lacoon Mobile Security, which was later acquired by Check Point.
Why start a business? In 2017, the Lazarus Group hacked into four South Korean exchanges and stole $200 million in Bitcoin.
At the time, Fireblocks founder Michael Shauolov was working at Check Point and was part of a task force investigating large-scale network breaches.
During the investigation, two things became apparent: the shift by cybercriminals from hacking traditional finance to digital assets, and the complexity and lack of solutions to secure digital assets in an enterprise environment.
Therefore, the obvious next challenge was to ensure the security of the blockchain. So Michael Shauolov co-founded Fireblocks with Idan Ofrat and Pavel Berengoltz.
Currently, Fireblocks has received five rounds of financing:
June 2019: Series A financing of 16 million USD;
In November 2020, the company raised 30 Miilion USD in Series B financing, with Paradigm participating in the investment;
In March 2021, the company raised USD 133 million in Series C funding from investors including Ribbit Capital, Coatue, and Stripes.
In July 2021, the D round of financing was 310 million USD, and investors included Sequia Capita, with a valuation of 2.5 billion USD;
In December 2021, the E round of financing was 550 million USD, with investors including D1 Capital Partners, and a valuation of 8 billion USD;
Fireblocks’ valuation has surged 3x in just 6 months and is now one of the three most valuable private companies in Israel.
2 Secret Network The first privacy-preserving smart contract public chain based on Cosmos
Secret Network is the first privacy-preserving smart contract public chain built on the Cosmos technology architecture (supporting the deployment of smart contracts + privacy attributes + Cosmos scalability and interoperability).
Secret Network is a Layer 1 privacy public chain built based on Cosmos SDK and Tendermint core consensus mechanism. Through the IBC protocol, it can achieve interoperability with other Cosmos SDK application chains that have opened the IBC interface.
Secret Network achieves data privacy mainly through several main components: encrypted smart contracts (Secret Contract) and trusted execution environments (TEE: Trusted Execution Environments).
The founding team of the project is SCRT Labs, and the team members include: Guy Zyskind (Founder and CEO), Itzik Grossman (Vice President Of Engineering), Nir Zyskind (Director of Operations and Business Development), Assaf Morami (Lead Software Engineer), Tom Langer (Senior Software Engineer), etc.
Founder Guy graduated from Tel Aviv University in Israel with a bachelor's degree in electrical engineering and computer science, and received a master's degree from the Media Lab of the Massachusetts Institute of Technology. In June 2016, he founded SCRT Labs as co-founder and CEO.
Privacy issues will become increasingly important in the future, and there is a huge demand, so the chance of Alpha appearing in the privacy track in the future is very high.
Currently, the biggest problem in the privacy track is not privacy, but the high cost, low efficiency and poor user experience brought about by protecting privacy. Therefore, many privacy technologies are still not popular.
Therefore, Secret Network, as the first smart contract public chain with privacy functions, brings new possibilities to the industry.
From the project itself, as the first privacy public chain in the Cosmos ecosystem, it is also the privacy public chain with the most complete ecological development.
Starting from privacy functionality, the chain has built a privacy-specific infrastructure for the Web3.0 era. Currently, the project has built a complete cross-chain bridge infrastructure, and the ecosystem is gradually enriched.
Currently, Secret Network has received two rounds of financing:
May 6, 2021: Received US$11.5 million in strategic financing from Arrington XRP Capital, Blocktower, Spartan Group, and Skynet Trading Ltd.
January 19, 2022 $400 million ecosystem fund SCRT Labs, DeFiance Capital, Alameda Research, CoinFund, HashKey Group, Hashed, Arrington XRP Capital, Dragonfly, Distributed Capital, Skyvision Capital, Blocktower, Terraform Labs, Hartmann Ventures, NGC Ventures, Figment, ArkStream investments.
3 Starkware, a Layer2 unicorn with a valuation increase of $6 billion in half a year
StarkWare, a blockchain privacy solution provider, is headquartered in Netanya, Israel. The company’s two co-founders, Eli Ben-Sasson and Alessandro Chiesa, are also the founders of ZCash.
Its main goal is to further promote the breakthrough blockchain privacy solution zk-Starks developed by the Israel Institute of Technology.
It continues the zero-knowledge proof protocol to protect the privacy of information on the blockchain, and on the one hand it can support compressing massive data into smaller samples.
On the other hand, it is more efficient, transparent and secure than quantum computing. One major advantage is that it ensures the integrity of the calculation while proving private information without consuming a lot of computing power.
Starkware currently has two products:
1. StarkEx provides customized ToB services for applications. Applications running on StarkEx can customize their business logic.
StarkEx serves applications such as Defi and games, can speed up transactions, reduce transaction fees, and achieve data availability through ZK-Rollup or Validium solutions.
2. StarkNet is a permissionless, decentralized, censorship-resistant general-purpose layer 2 network on which any user and developer can deploy smart contracts written in the Cario language.
These two products correspond to two different business models. The former provides customized services for applications and sells them, while the latter provides unlicensed general services and then charges transaction fees on the network or acts as a node to extract MEV based on the principle of transaction fees first.
The Starkware team is from Israel. Its main members are computer science and cryptography developers with backgrounds from the Hebrew University and the Israel Institute of Technology. They can be said to be the strongest team in the field of zero-knowledge proof.
From Starkware's official website, we can see that the team currently has 77 members, plus 7 subject consultants and 5 other consultants. The main members include:
Eli Ben-Sasson: Co-Founder & Chief Scientist, PhD in Theoretical Computer Science from the Hebrew University, has been engaged in research on computational integrity, cryptography, and zero-knowledge proofs for a long time. Professor of Computer Science at the Israel Institute of Technology. Founding scientist of Zcash, inventor of zkSNARK and zkSTARK.
Uri Kolodny: Co-Founder & CEO, Bachelor of Computer Science from the Hebrew University, is a serial entrepreneur with extensive business experience and good collaboration skills.
Alessandro Chiesa: Co-Founder & Chief Scientist, Professor of Computer Science at the University of California, Berkeley. Founding scientist of Zcash, co-inventor of zk-SNARKs, and core developer of libsnark, a leading open source library for concise zero-knowledge proofs.
Michael Riabzev: Co-Founder & Chief Architect. He holds a PhD from the Israel Institute of Technology and has worked at Intel and IBM.
Oren Katz: Vice President of Engineering. Graduated from the Computer Science Department of Hebrew University, MBA from Tel Aviv University, senior engineer with 20 years of experience.
In terms of financing, StarkWare has disclosed seven rounds of financing, involving 45 investments and a disclosed financing amount of US$273 million.
On May 25, 2022, StarkWare, the zero-knowledge proof developer of Ethereum's second-layer scaling solution StarkNet, completed a $100 million Series D financing round with a valuation of $8 billion, taking a commanding lead in the competition for Ethereum scaling solutions.
You should know that in November 2021, StarkWare just completed a US$50 million Series C financing round led by Sequoia Capital, with a valuation of US$2 billion. That is to say, in just half a year, StarkWare has quadrupled, jumping to US$6 billion.
Recently, due to a series of upgrades in Ethereum, the Layer2 craze has resurfaced. Due to the superiority of Starkware technology, in the long run, I am very optimistic about the development of zk-rollup and STARK.
In the later stage, with the incentive effect brought by the release of tokens and the gradual shift of the network towards decentralization, Starkware will be one of the strongest competitors in the Rollup track.