Flashbots Wants To Raise $50 Million, But Investors Must Pitch

Dalmas Ngetich

2 years ago

3 mins read

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Flashbots is seeking to raise $50 million with a $1 billion pre-money valuation, according to The Block, citing sources aware of the deal.

Pitch To Flashbots For A Chance to Invest

As they look to crowdfund, it has been revealed that Flashbots is doing a “reverse pitching” where interested investors have to pitch, not the other way around. In this arrangement, investors confident of Flashbots’ prospects must explain, in detail, why they should have a slot in this investment round.

Eventually, the goal is to raise between $30 million and $50 million in “equity investment,” pushing the firm’s valuation to unicorn status. Flashbot plans to split this investment round into two.

Although Paradigm didn’t respond publicly to the publication’s request for comment or comment on the inquiry, details reveal that the crypto fund was among the first to show interest. They participated in Flashbots’ seed sale in 2020. However, Flashbots didn’t indicate the amount raised in the seed sale.

Flashbots is a research and development organization claiming to negate the effects of maximum extraction value (MEV) in account-based blockchains like Ethereum and the BNB Smart Chain (BSC).

Ethereum Price Chart | Source: ETHUSD on Trading View

Specifically, Flashbots focuses on Ethereum, where the costs of MEV can be high considering the high on-chain activity and the impact of gas fees, which is also relatively high versus other more scalable networks, including BSC. Their involvement, Flashbots’s documents explain, avoids the “existential risks MEV could cause to state-rich blockchains like Ethereum.”

Tackling MEV

MEV in blockchains is the maximum value that can be extracted from block production after validators, tasked with confirming transactions and securing the network, include or even re-order transactions in a block.

Unlike Bitcoin, where transaction order is given, in Ethereum and similar networks, ordering is haphazard. It means profit-seeking validators can prioritize transactions tagged with higher fees.

This explains why whenever the MEV in a block is higher than the network block reward, a validator can decide to re-order transactions in a block, creating vectors for possible centralization and exploitation.

Flashbots curbs this problem using MEV Boost. It is software allowing builders to auction blocks to validators, averting MEV centralization. Each party earns a fee for their contribution.

Flashbots’s recent open source tool, Single Unifying Auctions for Value Expression (SUAVE), further decentralizes and avails, to everyone, including competitors, the MEV Boost.

The reason for open-sourcing SUAVE is novel and meant to help the entire ecosystem grow stronger by proper decentralization.

In Devcon Bogota, Philip Daian of Flashbots said:

“So, we’re going to use MEV as this decentralized engine in the long term to make sure the users get the best execution on their trades in a way that will make TradFi look embarrassing very shortly.”

Feature Image by The Block, Chart from Trading View

Dalmas Ngetich

Dalmas, a seasoned crypto reporter, brings a unique perspective to the industry. His specialization in NFTs, blockchain, DeFi, and blockchain news for NewsBTC, combined with a background in mechanical engineering and over a decade of experience in journalism, has allowed him to craft over 10,000 news and feature articles over the past eight years. His diverse range of topics, including technology, Forex, and finance, reflects his comprehensive understanding of the crypto landscape.

His technical expertise and analytical skills have been recognized and featured by leading news outlets such as Investing.com, CoinTelegraph, Entrepreneur, Forbes, and other authority sites. Notably, he broke key news, including the Ripple and MoneyGram partnership, cementing his position as a thought leader in crypto.
The news exploded. Over 100,000 people devoured this meticulously crafted report, from seasoned investors to curious newcomers. His analysis wasn't just dry facts and figures; it crackled with insight, dissecting the implications of the partnership and its potential impact on the future of finance.

His deep understanding of the financial markets, technological advancements, and blockchain developments has made him a respected voice in the industry.

Dalmas is also the founder of BTC-Pulse, a crypto news site, further demonstrating his commitment to the field. He firmly believes that DeFi and NFTs are here to stay and will continue to drive financial inclusion.

Coming from Nairobi, Kenya, it is easy to see the source of his inspiration: Across Africa, millions lack access to traditional banks. Remote villages, limited documentation, and high minimum balances create insurmountable barriers.

DeFi, not just Maker or Aave, for example, but think of Bitcoin and USDT, cuts out the middleman. Forget banks with their limitations.
Even so, DeFi isn't a magic solution. The continent still struggles with reliable internet access, and educational campaigns highlighting the benefits of this wonderful solution are insufficient. Moreover, even for those interested, understanding DeFi can look like learning a new language.

Dalmas is here to help make the tech easy to understand and digestible, even for beginners.
The story of DeFi in Africa is still being written. Challenges abound, but the promise of a more inclusive financial future is a powerful motivator. With innovation and collaboration, Dalmas firmly believes that DeFi could become the key to unlocking Africa's full economic potential.
This possibility and its immense value motivate Dalmas to continue breaking key DeFi innovations and more across the globe. His engineering background further enhances his ability to deliver well-thought-out pieces that blend technical insight with clear, impactful reporting.

Beyond his professional achievements, Dalmas is deeply passionate about technology and politics. Policies drive adoption, and being at the forefront and keeping up with how they evolve is crucial for the sphere to mature.

When Dalmas is not closely monitoring the latest crypto events, he can be found in nature, exploring the picturesque countryside, and traveling with his family and friends. His love for adventure and discovery perfectly complements his investigative and reporting skills.
You can connect with Dalmas on X: @Dalmas_Ngetich, or contact him on Telegram @Dalmas_Ngetich.

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