Blocknative, a San Francisco-based startup providing infrastructure for the Ethereum blockchain, announced Thursday it has raised $15 million in a new funding round to provide for what is known as the “block building” market created by the Ethereum Merge.
The funding for the A-1 Series round came from Blockchain Capital, Foundry Group, Rho, IOSG Ventures, Robot Ventures, Fenbushi Capital, HackVC, and Industry Ventures, among others. This funding brings the total raised by the company to $34 million to date.
The Ethereum Merge, which was completed on Sept. 15, changed the blockchain from “proof of work” to “proof of stake.” That fundamentally changed how transactions on the network are validated and introduced “block builders” as a major economic factor. Block builders determine what transactions are added to blocks and how they are ordered.
Ever since the Merge, Blocknative’s relay and builders have added more than 19,000 blocks to Ethereum’s blockchain, according to MEVboost.org. That has put Blocknative amidst the top block builders on the public blockchain.
Shortly after the Merge, Blocknative launched its block-building MEV relay service. MEV refers to “maximal extractable value,” which is the process by which individual operators who create new blocks on the network can further profit by ordering transactions by using their control over the network. Through the MEV relay, they would be able to extract further value than the usual block reward that they would receive for validating blocks on the network.
“With this new financing round, Blocknative is ideally positioned to vigorously pursue the block-building opportunity and help drive equitable value recirculation throughout the entire Web3 transaction supply chain,” said Matt Cutler, co-founder and chief executive of Blocknative.
In addition to providing infrastructure that allows Ethereum validators to create more profitable transaction bundles, Blocknative also provides a number of other services with its blockchain infrastructure solutions. These solutions include transaction preview, a Web3 app integration feature, a mempool explorer, a transaction cost estimator and a high-speed transaction distribution network.
“Blocknative has been a core infrastructure provider to many of Web3’s leading projects,” Queenie Wu, a partner at IOSG Ventures, said about the funding. “I first connected with them while leading partnerships for a top Ethereum wallet provider and was impressed with the reliability and quality of their platform.”
Blocknative Relay has been adopted by many major Ethereum staking pool operators and is now used by more than 290,000 registered validators, or over 60% of the global network.
The infrastructure that the company builds is used by many well-known projects, including the crypto wallet MetaMask, the decentralized finance app Lido, the decentralized exchange Curve, the Ethereum Foundation, the Polygon Foundation and many others.
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