Payy, a privacy-focused Ethereum Layer 2 project, announced a $6 million funding round on March 15, 2025, as demand grows for confidential transactions on public blockchains. FirstMark Capital led the round, while DBA Crypto joined as a participant. The announcement came through a post on X. The company did not disclose how it will use the capital, yet the raise comes as privacy tools draw more attention from institutions and regulators alike.
FirstMark Capital led the investment and gave Payy backing from a venture firm with a broad technology portfolio. That portfolio includes Pinterest, Shopify, and Riot Games. In turn, the firm’s involvement gives Payy support from a well-known investor outside crypto-native circles.
DBA Crypto also joined the round and brought sector-specific expertise to the table. The firm focuses on blockchain and digital asset investments. As a result, Payy now has both general venture backing and a specialist crypto investor in its corner.
Payy did not share a detailed use-of-funds plan. Even so, such rounds often support product development, research, and hiring. For that reason, the funding may help the company move faster toward mainnet deployment.
Ethereum Layer 2 networks handle transactions away from the main chain and later settle proofs on Layer 1. This setup helps reduce congestion and cuts gas costs. Today, the market includes Optimistic Rollups, Zero-Knowledge Rollups, and Validiums.
Payy reportedly relies on advanced zero-knowledge cryptography. That design allows transactions to be verified without exposing sensitive information. While many Layer 2 projects focus on scale, Payy is targeting privacy as its core use case.
The Layer 2 market has expanded quickly since 2020. Arbitrum and Optimism lead the Optimistic Rollup segment. Meanwhile, zkSync and StarkNet remain leading names in zero-knowledge rollups. Yet privacy remains a thinly served part of the market, and Payy is trying to fill that opening with tools for private decentralized finance and enterprise use.
Payy says its model runs on a single Layer 2 and needs no smart contract changes. That feature may reduce friction for developers and issuers looking to use the network. Still, the same design leaves the project with a clear adoption challenge.
The company has already signed undisclosed partners, including stablecoin issuers, and plans to reveal them soon. Those early partners matter because they can bring the first wave of volume to the network. Without that activity, how will Payy prove that its privacy pools can support real utility?
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The push comes as the broader stablecoin infrastructure market shifts toward institutional adoption. Payoneer has applied to the Office of the Comptroller of the Currency to open a digital bank and add stablecoin capabilities for nearly 2 million customers. At the same time, PhotonPay is raising tens of millions to expand its rails and already processes more than $30 billion in annualized payment volume.
That competitive backdrop creates pressure for smaller entrants. Payy’s closed privacy system must compete with larger, compliance-focused infrastructure players chasing the same institutional market. PhotonPay’s scale and Payoneer’s regulatory ambitions show how fast that race is moving.
Payy’s $6 million raise gives the project fresh backing as it builds a privacy-focused Ethereum L2 for confidential blockchain transactions. With FirstMark Capital and DBA Crypto onboard, the company now faces a key test: turning early partner interest into real network activity and stablecoin-driven adoption.