Solana Block Explorer Solscan Set to Raise $4 Million in Seed Round

Block explorer and analytics firm Solscan, which tracks data on the Solana blockchain, is set to raise $4 million in a seed round, according to sources familiar with the deal.

The round is being led by venture firms Multicoin Capital and Electric Capital, and backed by Jump Capital, Alameda Research, Solana Capital, Signum Capital, and CoinGecko. 

Singapore-based Solscan will use the money to improve its block explorer and launch a new analytics platform, Solscan Analytics.

"Peer projects using Solscan as a block explorer will bring new users to us, and they will further use Solscan for other features, like a wallet watch list, DeFi dashboard, [and] NFT scan," Long Vuong, Solscan’s CEO told Decrypt.

A block explorer is an online tool that tracks transactions made on a blockchain. It shows where (digital) money has been moved to and from and gives data on the network as a whole. With regard to the "NFT scan" feature, Vuong explained that Solcan will soon add an "NFT dashboard" to its toolkit.

NFTs are unique tokens that function as a deeds of ownership over digital items, such as art or video game inventory. And the market for these tokens has boomed over the last year, with more than $10 billion in sales this year alone. While most of this activity happens on Ethereum, NFT sales on Solana have been picking up within the last few months.

With the new NFT dashboard on Solscan, users can now track "all the NFTs on the Solana network (~8M of them so far), together with their sold price, transactions, and collections," Vuong said. "All the new NFTs are tracked in real time as well."

Solana is the network behind the crypto market's fifth biggest digital asset, with a market cap of $54.8 billion. Its coin, SOL, is used to pay for transactions in the DeFi (short for "decentralized finance") ecosystem and for NFT trading activity. 

Solana is an Ethereum competitor: it is cheaper and faster than the second largest cryptocurrency's network and, because of this, its value has soared this year. 

Investors are flocking to the asset partly because of interest in DeFi—which refers to products and services that allow users to trade, borrow, and lend crypto assets without third-party intermediaries.

Most DeFi apps are built on Ethereum, but the network is congested and therefore costly. It's not uncommon for fees on the network to run into the hundreds of dollars for a simple transaction. Transaction fees on Solana, on the other hand, are still measured in pennies. These low fees, however, do come at a cost: the network is prone to bots that "spam" transactions during token sales, which can result in a slow down–or even shut down–of the network.

Nevertheless, Solana continues to attract DeFi users looking for an economical alternative to Ethereum. Right now, there is $11.35 billion locked up in Solana DeFi protocols, according to DeFi Llama. 

Solscan also told Decrypt that it would next year release a number of new products that will monitor and analyze the network as well as try and bring more users to the Solana network.

Editor's note: This article was updated after publication to amend the list of Solscan's seed round investors.