Blocknative, a San Francisco-based start-up that provides the infrastructure for the Ethereum blockchain, announced on Thursday that it has raised $15 million in a new round of funding to provide the so-called “block building” marketplace created by Ethereum Merge.
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. Thanks to this funding, the sum raised by the company to date is $34 million.
The Ethereum merger, which was completed on September 15, changed the blockchain from “proof of work” to “proof of stake”. This fundamentally changed the way network transactions were validated and introduced “block builders” as a major economic driver. Block builders determine what transactions are added to blocks and how they are ordered.
According to MEVboost.org, Relay and Blocknative builders have added more than 19,000 blocks to the Ethereum blockchain since the merger. This has placed Blocknative among the best block builders in the public blockchain.
Shortly after the merger, Blocknative launched a MEV relay service of building blocks. MEV refers to “maximum extractable value”, which is the process by which individual operators who create new blocks on the network can continue to profit by ordering transactions using their control over the network. With the MEV relay, they would be able to extract more value than the usual block reward they would get for validating blocks on the network.
“With this new round of funding, Blocknative is ideally positioned to vigorously exploit the opportunity to build blocks and help ensure fair recirculation of value throughout the Web3 transaction supply chain,” said Matt Cutler, co-founder and CEO of Blocknative.
In addition to providing the infrastructure that allows Ethereum validators to create more profitable bundles of transactions, Blocknative also provides a range of other services through its blockchain infrastructure solutions. These solutions include Transaction Viewer, Web3 Application Integration, Mempool Explorer, Transaction Cost Estimator and Fast Transaction Distribution Network.
“Blocknative has been the primary infrastructure provider for many leading Web3 projects,” Queenie Wu, a partner at IOSG Ventures, said of the funding. “I first came into contact with them while running partnerships for a leading 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 currently used by over 290,000 registered validators, over 60% of the global network.
The infrastructure that the company is building is used by many well-known projects, including the MetaMask cryptocurrency wallet, the Lido decentralized financial application, the Curve decentralized exchange, the Ethereum Foundation, the Polygon Foundation, and many others.