Near Foundation, the steward of the scalable and performant blockchain Near Protocol, said today it’s spinning out its modular product suite into Nuffle Labs and raised $13 million in external funding for the new company.

The new funding included a $7 million strategic grant from the Near Foundation itself to the newly formed company alongside $6 million from external investors led by Electric Capital. Other investors participating in the round included Canonical Crypto, Fabric Ventures, Robot Ventures, Lyrik Ventures and Caladan.

With the formation of Nuffle Labs, the new company will advance Near’s modular decentralized blockchain infrastructure by taking advantage of the company’s existing data layer and high-performance roll-up technology.

Modular blockchains work by separating the systems that make a blockchain work into different layers, such as consensus, transaction execution or data availability. This type of architecture operates differently than monolithic architectures where every task occurs on a single layer. It can be used to make them more efficient and scalable, especially for building applications that require custom priority for transactions or handling processing.

The Near Foundation provides a blockchain ecosystem that allows high scalability for Ethereum using a protocol for what it calls “horizontal scaling” using sharding through a technique called proof-of-stake. That allows it to run more cleanly than computationally intensive blockchain architectures such as the one underlying bitcoin.

Nuffle Labs will use this technology, built on Near’s Data Availability and Fast Finality Layer products, to provide enhanced capabilities for its product offerings. The Near DA layer is the company’s scaling architecture that greatly reduces transaction costs on the blockchain by prioritizing and “rolling up” numerous transactions into one and then submitting them all at once to Ethereum so that can be executed quickly.

The Fast Finality provides rapid settlements for transactions between different blockchains using EigenLayer, a protocol that allows tokens to be staked across chains.

Near said making Nuffle Labs an independent company,will help better position it competitively for building out the modular blockchain infrastructure alongside the Near Foundation and other blockchain ecosystems that it will interact with.

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