Movement Launches with $10 Billion FDV - What Does Its Lead Investor, Hack VC, Think?

On October 9, 2024, Move-EVM L2 project Movement announced the launch of its token. On the same day, leading exchanges such as Binance, Coinbase, OKX, and Upbit listed its token, MOVE. After its launch, MOVE performed exceptionally well, with its price climbing above $1, which meant that Movement’s FDV (Fully Diluted Valuation) surpassed $10 billion right out of the gate.

Movement’s performance has become the envy of other projects, raising questions from industry insiders: "Top-tier capital backing, launching on three major exchanges, with massive price pumps driven by big investors—it's got the attention of Generation Z. But all this is based on launching an ERC20 token on Ethereum..."

Why did Movement start with a $10 billion market cap? Is a $10 billion valuation too high for Movement? On December 10, 2024, Movement’s Series A lead investor Hack VC published a statement discussing its investment rationale.

Today marks a significant milestone for Hack VC’s portfolio company, Movement Labs, as the company launched its mainnet testnet and native token. At Hack VC, we co-led their Series A round. This article shares our investment philosophy behind Movement.

The Problem
Since the inception of Web3, smart contract hacking has been a major issue, and largely, this problem remains unsolved. In 2022, over $3 billion was lost due to smart contract hacks.

Solving the smart contract security problem is key to Web3 and DeFi becoming successful and mainstream. In traditional finance, systems are behind firewalls, and codebases are private, so catastrophic events are rare. If you're executing a Stripe transaction, a wire transfer, or a Venmo payment, you typically don’t think about the code behind those transactions. That's because people don’t have to worry about the code being compromised.

Unfortunately, in the current state of Web3, you do need to worry about that, and until these issues are resolved, mainstream adoption will continue to be limited. Web3 systems exist on open networks, and codebases are open-source and public. This effectively hands criminals a treasure map. The treasure is laid out, and the size and contents of the chest are crystal clear.

In the current state of Web3 dApp development, this situation will persist. Ethereum dApps are typically written in Solidity, which we consider to be an unsafe language for developers. Because the language is neither type-safe, memory-safe, nor formally verifiable, developers can easily make mistakes. This leads to reentrancy attacks, which were the primary cause of the $3 billion in smart contract hacks mentioned earlier.

At our annual shareholder meeting, Movement Labs’ co-founder Rushi Manche will directly address these issues and discuss how next-gen virtual machines like Move are paving the way for more scalable, secure, and developer-friendly blockchain solutions.

Background: The Move Language
The Move programming language helps solve these challenges and is a major improvement for building Web3 dApps compared to the status quo. The language is strongly typed (fewer errors) and formally verifiable, reducing the likelihood of smart contract hacks and making it easier for developers to spot and fix mistakes.

Sui and Aptos were the first to use Move in Web3, attempting to disrupt Ethereum and some of the blockchain technologies from 2018, such as Avalanche, Hashgraph, and Polkadot. The versions of the Move virtual machine built by the Sui and Aptos teams are slightly different.

Movement’s Vision
Movement Labs is building a modular chain network based on the Move programming language, aiming to enhance Web3 security, performance, and user experience. Its first product is an Ethereum L2 built using Move, allowing dApps in the Ethereum ecosystem to leverage the Move language while utilizing Celestia for data availability. Movement supports both Sui’s and Aptos’s variations of Move, and also includes a traditional EVM interpreter for backward compatibility.

Here are some interesting value propositions:

New dApps based on Move can be built from scratch on Ethereum L2 using Move, rather than Solidity. This is an improvement compared to native EVM dApps since Solidity is neither type-safe nor formally verifiable, making it prone to errors and attacks. Move solves these issues by providing a more secure environment for Ethereum ecosystem smart contracts.

Existing dApps running on Sui or Aptos can cross-deploy to Ethereum. This is significant because it enables these dApps to access Ethereum’s higher liquidity/TVL while still remaining on their original chains.

This “expands Move’s share.” Theoretically, the above Move dApps can easily be ported to Aptos or Sui, allowing these dApps to access users across multiple chains and providing Aptos and Sui with access to other dApps.

This broadens the usage of Move, which is important since developer adoption of Move is still in its early stages and will benefit all Move-based chains.

For backward compatibility, Movement also supports Solidity to allow legacy codebases to be accepted.

Security Benefits of Movement
Movement has the following security advantages:

Movement has a built-in security mechanism: the "bytecode validator." It checks the resource safety, type safety, and memory safety of transaction data. It uses a borrowing check scheme, allowing only one mutable reference to a value at any given time.

The bytecode interpreter only executes transactions when all security checks are met.

You can define a set of access permissions for modules and accounts, allowing people to have immutable (unchangeable) smart contracts beyond the expected methods. This is crucial for security.

The platform is built with type safety and memory safety, which helps prevent common reentrancy attacks seen in Solidity.

The validation tools can precisely locate target call states and use them to determine the impact of function calls.

Other Benefits Beyond Security
Movement’s stack offers many advantages beyond security:

Movement has created the EVM interpreter, Fractal, which allows older Solidity code to be translated into the modern Move VM environment, enabling backward compatibility with existing codebases. This is a significant innovation (compared to other Move environments like Aptos or Sui) because developers can access liquidity on EVM while maintaining compatibility with their existing dApp codebase. Since the code runs through the Move VM, it remains formally verifiable, as the code is eventually translated into Move via the compilation process.

Movement has its own decentralized shared sequencer, called M1, which integrates with Movement’s Ethereum L2. This provides reorganization protection and uptime guarantees via fast finality. It opens the door to parallel processing, boosting throughput by 10-100 times. These performance improvements make Movement well-suited for high-performance use cases such as gaming and low-latency DeFi. The low transaction costs also support fine-grained transactions, such as rapid NFT minting.

The Snowman module includes a BTC bridge for additional liquidity.

Cosmos interoperability is enabled through IBC support.

Movement uses a dual-staking model to provide financial incentives for decentralized ordering.

Built-in atomic composability between Rollups in the Movement ecosystem allows for transactions like atomic swaps.

Movement supports Typescript (a variant of JavaScript, which is the most popular language for Web2 development), expanding the developer pool. This provides an easy entry mechanism for Web2 developers to build in Web3.

Impressive Data
At the time of writing, Movement’s launch KPIs are impressive:

Movement has over 200 teams using its stack for development.
There are 5+ Move Stack Networks: Lumio, Up Network, Lync, Nexio, and io.net (the latter is another Hack VC portfolio company).
7+ teams natively developing on Movement have completed funding rounds.
The TVL committed amount exceeds $150 million.
1.2 million Galxe fans (ranked 20th globally).
1 million active addresses.
52+ Movement Twitter and Telegram groups across 5 continents.
Movement meetups spanning five continents.
Over 30 million transactions in the second week of the testnet.
Movement has raised over $30 million for long-term financial stability.
Its own startup accelerator, "Move Collective," has raised over $10 million to date.
Future Directions for Movement
Movement’s ultimate goal is to scale its vision even further. The aim is to have an execution environment supporting Move on any chain, any Rollup framework, and any DA layer. This is achievable because Movement has a fully decentralized shared sequencer (M1). These integrations will share a unified settlement layer. With this vision, developers can have their own dApp chains tailored to their use cases. Moreover, chains like Avalanche, Polkadot, and Hashgraph will be able to leverage the more advanced Move language. This will allow Move-based dApp developers to access a larger user base and TVL.

Movement may encounter unforeseen challenges that could impede its development, including execution, performance, competition, and other unpredictable factors.

Conclusion
At Hack VC, we believe security is crucial for the scaling and mainstream development of Web3. Movement has a comprehensive vision, and we believe it can significantly reduce or even eliminate smart contract hacks. While it starts with the Move language, the roadmap also includes plans to incorporate other security innovations into a final, robust, and comprehensive product.

Movement combines its security advantages with enhanced performance and user experience, and we believe this is the complete vision for transforming Web3. We are thrilled to have led Movement's Series A round and congratulate the team on today’s successful token launch. We look forward to the journey ahead.