Luxembourg VC Nextblock’s $3M Bet Targets a Missing Piece of Crypto Finance – Bitcoin News

Programmable Privacy Over Privacy Coins

Luxembourg-based venture capital firm Nextblock has invested $3 million to fully fund the seed round for Soda Labs, a cryptographic infrastructure startup building programmable privacy tools for public blockchains. The single-investor round will give Soda Labs a 12- to 18-month runway to expand commercial execution, scale its validator network, and advance go-to-market integrations with financial institutions, tokenization platforms, and payment companies.

The investment comes as privacy-focused digital assets, most notably zcash (ZEC), have strongly outperformed the market this year. However, Nextblock emphasizes that its investment strategy centers on utility rather than speculative market momentum.

“The fundamental problem is very simple: public blockchains are radically transparent, while real financial activity is not,” explained Pieter van Poecke, founder and general partner of Nextblock. “A bank, asset manager, or company cannot realistically expose every position, trade, balance, treasury movement or client transaction to the entire internet. As stablecoins, tokenized assets and other forms of financial activity increasingly move onchain, privacy stops being a niche feature and starts becoming a prerequisite.”

Van Poecke added that the long-term opportunity lies in bridging confidential execution with regulatory compliance. He argues that privacy and regulatory compliance can coexist through “programmable privacy,” which protects sensitive financial data while enforcing necessary rules and permissions. Consequently, Nextblock’s investment in Soda Labs is a strategic play on essential institutional infrastructure rather than a speculative bet on privacy coins.

Addressing AI Threats and Quantum Risks

Beyond market dynamics, Van Poecke highlighted the evolving security landscape facing blockchain architecture, particularly the dual pressures of artificial intelligence (AI) and quantum computing. While AI presents an immediate operational challenge by altering the economics of security research and accelerating vulnerability discovery, quantum computing represents an existential threat to foundational public-key cryptography.

“AI is already changing the economics of security research. It can help researchers and attackers find implementation vulnerabilities much faster, which means protocols need to become substantially more rigorous about auditing and continuous testing,” Van Poecke told Bitcoin.com News.

However, he cautioned against ignoring long-term cryptographic risks in favor of immediate concerns:

“Quantum is a different kind of risk. A sufficiently powerful quantum computer would not simply make existing attacks faster; it could fundamentally break widely used public-key cryptography. And the difficult part is that nobody knows exactly when that threshold will be crossed. So I think the industry has to deal with both time horizons simultaneously.”

Van Poecke argued that the blockchain industry must mitigate immediate AI-driven attacks today while proactively building post-quantum resistance. Delaying preparation leaves protocols vulnerable to sudden market repricing and insufficient time to adapt once a major quantum breakthrough occurs.

“That is why I don’t think complacency around post-quantum cryptography is justified simply because AI feels like the more visible threat today,” Van Poecke added.

Founded two and a half years ago, Soda Labs addresses institutional security and confidentiality demands by enabling regulated capital to transact on public chains without exposing sensitive transactional data.

Practical Infrastructure for Institutional Workloads

Rather than relying on specialized hardware, Soda Labs’ privacy engine uses standard, battle-tested cryptography—combining garbled circuits with multiparty computation on standard cloud CPUs. This architecture allows applications to run private, developer-defined computations while maintaining seamless connectivity with existing public blockchain infrastructure.

The new capital will support the expansion of Soda Bubble, a chain-agnostic coprocessor for programmable privacy. Bubble processes developer-defined privacy workloads from various blockchains without revealing private underlying data publicly or to Soda Labs itself.

“Public blockchains already have the liquidity, users, and financial applications. What they lack is a way for regulated money to move without showing everyone everything,” said Avishay Yanai, co-founder and CEO of Soda Labs. “Bubble gives banks, payment companies, and tokenization platforms privacy with controlled disclosure, on the chains they already use. This round lets us take it from pilots to production.”

Beyond expanding its validator network, the seed funding will support team growth and advance undisclosed pilots with banks, payment providers, and tokenization platforms, aiming to convert these trials into full production deployments.

“What attracted us to Soda was not only the underlying cryptography, but the practicality of the technology for the financial workloads we believe will matter most onchain,” Van Poecke noted. “Soda already had a working product and paying customers. We believe its differentiated technical IP, deeply technical founding team, and strong commercial instincts give the company a compelling foundation for its next phase.”