Former Plasma Group research team raises $3.5 million to start a new company

The former Plasma Group research team raised $3.5 million from Paradigm and IDEO to start a new company, called Optimism. This new venture will look to put Plasma Group’s original Optimistic Rollup design, a layer-2 scaling for Ethereum, into production. The raise and rebirth come less than a week after the team shut down the non-profit Plasma Group, which relied solely on donations to finance research efforts. Now, as a for-profit startup with an up-front investment, CEO Jinglan Wang believes the team will be able to focus on development instead of soliciting regular donations to sustain day-to-day operations.

Why it matters:

• The transition to a for-profit company makes a lot of sense. The former Plasma Group team was able to turn last year’s donations into a product it could potentially monetize. And they now have enough capital to focus on what they do best, which is a win for both the team members and Ethereum.
• In the announcement of Plasma Group’s closing, the team hinted they would look to tackle “the problem of funding and sustaining public goods” next. While Optimism will aim to productize Optimistic Rollups, the group simultaneously released details on a new proposal (dubbed miner-extractable value auctions) that could help fund community contributions through value created by the Ethereum network. This new implementation could fit within layer-2 systems, allowing Optimism to attack two of Ethereum’s most prominent challenges: scalability and sustainable funding for ecosystem development.