ConsenSys, a blockchain venture firm founded by Joseph Lubin, announced it has fully acquired Infura.
Infura provides critical infrastructure for developers to build new decentralized applications on Ethereum. The company originally secured funding from ConsenSys back in 2016, ultimately being adopted as one of the many Consensys spoke companies.
Since then, Infura has evolved into becoming the leading provider in infrastructure and tooling for building web3.0 applications. The company has served thousands of developers within the Ethereum ecosystem and handles billions of API requests per day. With this, Infura leverages an Infrastructure-as-a-Service (IaaS) business model. The model gives developers access to a suite of tools reducing the barriers-to-entry and drastically simplifies building on Ethereum. With Infura, developers can easily set up and maintain a full Ethereum node or IPFS node on Amazon Web Services (AWS) with targeted 24/7 uptime.
Prominent DeFi applications, including Metamask, Maker, 0x as well as the broader Ethereum ecosystem, rely on Infura’s APIs to connect their applications to the network. The recent release of Infura+ in July 2019, a premium Ethereum API subscription service, offers a tiered subscription service for developers to access increased daily request volumes and other support features. In addition to Infura+, the company offers basic functionality and other free services to easily on-ramp new developers to the ecosystem.
By establishing this robust web3.0 business model focused on Ethereum developers, it comes as no surprised that Consensys is fully acquiring Infura. With the acquisition, ConsenSys has formally acquired all of the rights to Infura, and the company will continue to operate as a wholly-owned business within Consensys.
Too much growth?
With Infura’s explosive growth in a nascent industry, come trade-offs.
Delphi Digital, blockchain research & consulting firm, released a report back in March 2019 surrounding some potential points-of-failure for Ethereum.
One of the problems outlined in the report was Ethereum’s heavy reliance on Infura. The reliance on a single infrastructure provider creates some degree of centralization risk for the network. For those unfamiliar, Infura outsources the node operations to AWS as it provides better uptime, storage, speed, and other features relative to individual full nodes. If a majority of developers and applications are running a full node through Infura, this potentially creates a single point of failure in the case of a disruption in Infura’s or Amazon’s services.
Regardless, Infura and ConsenSys recognize these risks and are working to further decentralize the ecosystem’s infrastructure. As an example, the team issued over $140,000 in grants supporting this initiative back in 2018.
Looking ahead, it will be interesting to see how Infura evolves with its full acquisition from Consensys, and how it will handle centralization risk if it continues to outpace ecosystem growth.
Analyst at Bankless – one of the leading resources for open finance. Lucas is an active contributor to the DeFi ecosystem with appearances in other notable DeFi outlets including The Defiant and Our Network. He has years of experience working with dozens blockchain and token startups where he focused on token economics, marketing, and growth.