flashbots is searching to raise $50 million at a pre-money valuation of $1 billion, according to The Block, citing sources familiar with the deal.
Introduce Flashbots for a chance to invest
While looking into crowdfunding, it has been revealed that Flashbots is doing a “reverse pitch” where interested investors have to pitch, not the other way around. In this arrangement, investors who are confident in Flashbots’ prospects must explain, in detail, why they should have a space in this investment round.
Eventually, the goal is to raise between $30 million and $50 million in “equity investment,” raising the company’s valuation to unicorn status. Flashbot plans to split this investment round in two.
Although Paradigm did not publicly respond to the post’s request for comment or comment on the query, the details reveal that the crypto fund was one of the first to show interest. They participated in the Flashbots seed sale in 2020. However, Flashbots did not indicate the amount raised from the seed sale.
Flashbots is a research and development organization that claims to deny the effects of Maximum Withdrawal Value (MEV) on account-based blockchains like Ethereum and BNB Smart Chain (BSC).
Ethereum price chart | Source: ETHUSD on Trading View
Specifically, Flashbots focuses on Ethereum, where MEV costs can be high considering the high activity on-chain and the impact of gas fees, which is also relatively high compared to other, more scalable networks, including BSC. Their participation, the Flashbots documents explain, avoids the “existential risks that MEV could cause to state-rich blockchains like Ethereum.”
MEV in blockchains is the maximum value that can be extracted from block production after validators, in charge of confirming transactions and securing the network, include or even reorder transactions in a block.
Unlike Bitcoin, where the transaction order is given, in Ethereum and similar networks, the order is random. It means that validators looking for profit can prioritize transactions tagged with higher fees.
This explains why when the MEV in a block is greater than the network block reward, a validator may decide to reorder the transactions in a block, creating vectors for potential centralization and exploitation.
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Flashbots curbs this problem by using MEV Boost. It is software that allows builders to auction blocks to validators, bypassing MEV centralization. Each party earns a commission for their contribution.
Flashbots recent open source tool, Single Unifying Auctions for Value Expression (SUAVE), further decentralizes and makes MEV Boost available to everyone, including competitors.
The reason for the open source SUAVE is novel and is meant to help the entire ecosystem become stronger through proper decentralization.
At Devcon Bogota, Philip Daian from Flashbots said:
“So, we are going to use MEV as this decentralized engine for the long term to make sure that users get the best execution on their trades in a way that will make TradFi look embarrassing very soon.”
Featured Image from The Block, Trading View Chart
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