• Flashbots is seeking to raise $50 million with a $1 billion pre-money valuation.
• Investors have to pitch why they should have a slot in this investment round.
• Paradigm was among the first to show interest and participated in Flashbots‘ seed sale in 2020.
Flashbots, a research and development organization focused on negating the effects of maximum extraction value (MEV) in account-based blockchains like Ethereum and the BNB Smart Chain (BSC), is seeking to raise $50 million with a $1 billion pre-money valuation. According to The Block, citing sources aware of the deal, Flashbots is doing a “reverse pitching” where interested investors have to pitch why they should have a slot in this investment round. The goal is to raise between $30 million and $50 million in “equity investment,” pushing the firm’s valuation to unicorn status, and eventually split this investment round into two.
Paradigm, a crypto fund, was among the first to show interest and participated in Flashbots’ seed sale in 2020. Flashbots’ documents explain that their involvement avoids the “existential risks MEV could cause to state-rich blockchains like Ethereum.” MEV occurs in blockchains when someone takes advantage of timing opportunities to make a profit from the trade’s execution by exploiting a blockchain’s functions. This could lead to the blockchain becoming congested, which in turn could lead to higher gas fees and increased transaction times.
Flashbots is focused on Ethereum, as the costs of MEV can be high due to the high on-chain activity and the impact of gas fees. They are working to develop open source software and protocols to help Ethereum users protect their funds from being exploited by MEV. The company is also working to develop a “marketplace” that will allow users to buy and sell MEV protection services.
Flashbots’ team includes Ethereum co-founder Vitalik Buterin, Coinbase co-founder Fred Ehrsam, and Blockstream co-founder Adam Back. The company has raised a total of $2.1 million in venture capital funding and has been backed by investors such as Paradigm, BlockFi, FBG Capital, and Placeholder. Flashbots’ team is confident that their technology can help Ethereum reach its goal of becoming a secure and reliable blockchain platform.
Overall, the goal of Flashbots is to create a safer and more efficient blockchain platform for users. By developing protocols and software to protect users from MEV, Flashbots is working to ensure the long-term success of Ethereum. With the help of Paradigm and other investors, the company is confident that it can reach its goal and become a unicorn.