Nym, a developer of a decentralized privacy infrastructure, has raised USD 13m in a Series A funding round, as the startup prepares to launch its mainnet in the coming months.
The funding round was led by venture capital giant Andreessen Horowitz (a16z) and joined by a number of other high-profile investors, including Digital Currency Group, Huobi Ventures, HashKey, and others, as well as some individual node operators on the network. The latest round followed a USD 2.5m seed investment in 2019 led by Labs, and a USD 6.5m round in July this year led by Polychain Capital.
Speaking with Cryptonews.com during the Blockchain Economy Expo 2021 conference in Dubai this week, Nym’s CEO, Harry Halpin, said that the startup is now focused on launching its mainnet, which is estimated to happen “by the end of the year or early next year.”
“Once we actually hit mainnet, we’re gonna see a lot of adoption pretty rapidly,” the CEO said.
According to him, the company’s testnet has managed to reach 10,000 nodes, which he said is “almost as big as even Bitcoin.” (The Bitcoin (BTC) network now has almost 13,500 nodes, per bitnodes.io data).
Nym provides network-level privacy that works “sort of like a super VPN that is resistant even against the nation-state-level adversaries,” per Halpin. Meanwhile, unlike many other projects that have launched their own tokens, Nym is not aiming for its token – NYM – to be used for payments or any other functions outside of its own network. The company instead supports the use of BTC for payments.
Watch the full interview, where Harry Halpin discusses Nym’s business model, their partnerships, further capital raise plans, privacy-related trends, how the startup solves its challenges, and why Facebook‘s metaverse is “a giant scam.”
The interview is brought to you by Matt Zahab and Eimantas Žemaitis.
The transcript of the interview:
What is Nym and what you guys have achieved so far in 2021?
What Nym is is we do network-level privacy. So I send a packet over the internet – any packet – it doesn’t matter if it’s using a web browser or it’s a Bitcoin transaction – that packet reveals a lot of information about me and who I am. You get revealed the time the packet was sent, the size of the packet, and often the content of the packet if it’s not encrypted. So you can use this kind of information to basically stop transactions, block transactions, and deanonymize transactions if you’re interested in privacy. And what Nym provides is layer 0, network-level privacy – sort of like a super VPN that is resistant even against the nation-state-level adversaries.
This year we got funding from Polychain, our testnet got to 10,000 nodes – that’s almost as big as even Bitcoin, it’s bigger than Tor, and we expanded our team of 8 to about 30 people, so we’re really speeding up and scaling really well.
The name Nym, where does that come from?
So Nym, if you think about it, comes from the word pseudonym or if you heard the word anonymous, Nym comes from that – Greek root for a name. So anonymous means no name, pseudonym means a false name. When the cypherpunks, people that created Bitcoin, were originally trying to communicate over email, people were trying to figure out what’s their real identity, what is Satoshi’s real identity, they used something called a Nym server to basically hide using what’s called a Mixnet – the same technology that we have, the source of their email. So Satoshi Nakamoto himself used an early version of our technology – a Nym server-based either I think on a Mixminion or a Mixmaster probably – to hide his identity so it was very difficult to verify who’s sending that email.
What are your growth plans for 2022?
Our growth plans – we plan to get a bit more funding – that should be announced I think later next week – to make sure we have, in case the market does take a turn to bear market, we have a three or four-year roadmap. But to be honest, we’re doing…..the software is highly developed, we think we can launch the mainnet by the end of the year or yearly next year, so that’s our main goal.
Your business model – what does it look like?
Essentially, you know, when you do Bitcoin, you mine and you make bitcoin. Nym is a mixnet – we mix packets up – it’s like each packet is a deck of cards, and we randomly shuffle those packets – that’s mixing. So we reward people for mixing and you get a reputation for mixing – those are given to you in a tokenized reputation form – that’s the Nym token. It’s all in the whitepaper if you want more details. And then if you want to make some traffic more private, you want all of your packets to look the same, you want them mixed up, you pay a very small transaction fee, and just as people pay transaction fees for Bitcoin to get their block in faster, we think will pay transaction fees for Bitcoin transactions to make their Bitcoin transactions more private. Or, for example, a VPN – you pay monthly for VPN, you can also pay monthly for like a super decentralized VPN that is even harder to attack, and we that is also a good business model.
What do you and the team have working on a partnerships side?
On a partnerships side we have a big announcement coming out later this week but we’re generally are really well respected, we’re already part of the Liquid federation, so we’re partnering with Blockstream, we have continual conversations and interest from Brave, we’re good friends with Moxie (Marlinspike, CEO) from Signal, and we even have a member of Google has joined our advisory board, Ben Laurie (Principal Engineer @ Google). I think we have a lot, once we actually hit mainnet, we’re gonna see a lot of adoption pretty rapidly.
After this summer’s fundraising round, what are the capital raise plans moving forward?
You know, I’m old fashioned, I think if you raise too much money, it becomes an attack surface – you saw what happened with Tezos – you have fake founders, you have Craig Wright, people who want all this cash, so I think its better to raise funds more like a normal startup, so what we always want is double our funding, so this is our last round it was about six million, then we’re going to do twelve million round, scale with that and then we’ll probably want 25 million, and we’ll keep scaling like that. It’s because we’re more interested in building the software than like raising a 50 or 200 million dollar round. Most of the projects that have raised a large round size have actually failed the ship – raising too much makes you lazy. It’s better for a startup to remain lean and hungry.
What are Nym’s main problems right now and what are the solutions you’re throwing at them?
Our main issue is that we have a lot of people that really want to somehow get tokens or get involved and they expect airdrops – we’re not doing an airdrop, we keep telling people that. The testnet token is valueless but we keep having what I would call Sybil attacks on the testnet where people are trying to jump into our testnet without doing any work – so that’s a big problem.
Another big problem is that as you get larger and larger, as market heats up, the quality of the community kind of goes down – we have lots of pump and dumpers and token flippers are there and that’s a problem, we even manage these kinds of people in your Telegram channel.
In terms of business, we don’t expect to have any problems – we have very good lawyers, we’re a very well respected team. We occasionally have a few projects that are trying to copy us – like this morning a project literally copied our Twitter and our whitepaper and put a new name on it and announced they are going to do a token sale on it – these sort of things happen in a bull market. I think intelligent people will tell the difference between a good project and scam.
What are some of the privacy-related trends we’re seeing in crypto and where do you see these moving forward in the future?
So zero-knowledge proofs is taking off, zero-knowledge proofs is how you can prove to you that I know something without revealing to you what it is I know. I think there will be continental work in there. We have our own kind of very easy to use anonymous credential system which is a simplified zero-knowledge proof system – I think this technology will continue to progress and will become faster and better but again the problem is without protection at the level of networks, the packets themselves, I can encrypt a packet and send it to you but you can still look at the network stream, the peer-to-peer broadcast, I can still track you down. So I thing what we hope is that zero-knowlege projects improve and get better and that we become a kind of network level privacy solution provider for these kinds of projects.
Besides privacy, what other trends are you looking forward to for the next two-three years?
I am not so excited about NFTs, although I guess the art market has always existed and rich people always hidden money in art – art currently beats inflation. I am very excited about, I think there is something to say for DAOs and democratic self-organization – you know, people are historically excluded from participating in shareholder governance, participating in representative democracy – I think anything which enables people be autonomous and self-organized to directly democratically organize is very exciting so I do think there is a big future for DAO-based technologies even though we ourselves don’t currently have one.
What’s your take on the metaverse?
The stuff that Facebook was pushing is just a giant scam – is just to increase their surveillance of you. Every so often as the wealthy people in Silicon Valley and Washington DC let the entire planet burn I don’t think its a very good idea to, like, put everyone in like a retarted version of the Matrix where we’re being fed VR all the time. I do think with COVID that was the understandable business model and I do think people should of course own whatever they make in these games like World of Warcraft or whatever – I agree with that. But I’m not particularly excited about the metaverse – I’m more excited by causing a political, social and financial change in this universe – the real world – and I think that’s where we should focus our energies.
Where do you see bitcoin going on January 1, 2022 and 2023?
I mean historically it crashes after thanksgiving but this is a very special year, we have lots of institutional money coming in – we could keep going up. I don’t give financial advice, but I do personally only hold bitcoin, and I do hope it goes up but I never count. I would be super excited if it broke 100k on the New Year – I would pop a bottle of champagne.