DeFi: Flashbots raises at $1B valuation; Animoca invests $30MM in Web3 neobank hi
In a time when AI investments are all the rage, we are not surprised to see Flashbots bring the limelight back to crypto
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Today we highlight the following:
DEFI & DIGITAL ASSETS: Ethereum Software Infrastructure Provider Flashbots Raises $60MM (link here)
INVESTING: Metaverse Giant Animoca Brands Plunges $30MM Into Crypto 'Super App' hi (link here)
CURATED UPDATES
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DeFi Short Takes
DEFI & DIGITAL ASSETS: Ethereum Software Infrastructure Provider Flashbots Raises $60MM (link here)
Flashbots, the prominent MEV research and development firm, has raised $60MM in a Series B funding round led by Paradigm, a crypto-focussed investment firm. Investors in the round were selected based on their reverse pitches, highlighting the hype surrounding Flashbots, and its valuation is reportedly now over $1B.
Maximal extractable value (MEV) is Flashbots’ bread and butter. MEV is the value that can be extracted by blockchain network operators by re-ordering or previewing pending blockchain transactions to realize the most cost-efficient ordering. Techniques like front-running transactions are common, whereby fees are paid to move ahead in the ordering, but it comes at the cost of deteriorating the average end-users experience.
Flashbots focuses on mitigating the negative externalities posed by MEV, with a primary focus on Ethereum. Its products include Flashbots Auction, a marketplace for transaction ordering; Flashbots Data, its dashboards for MEV data; MEV-Boost, a solution for minimizing the negative impact of MEV through proposer-builder separation that is used by many validators on Ethereum; and Flashbots Protect, an RPC endpoint protecting against frontrunning and failed transactions.
This round, in particular, will help fund its SUAVE (Single Unifying Auction for Value Expression) platform. SUAVE aims to be an independent network that can perform the roles of a decentralized block builder and act as a mempool (the list of pending transactions). At a high level, developers can use it to create intra-block applications, which can be designed in ways that provide users with custom benefits like cheaper or more private transactions than otherwise could be completed on Ethereum.
In a time when AI investments are all the rage, we’re not surprised to see Flashbots bring the limelight back to crypto. Its current offering makes it a foundational tool for Ethereum validators, which manage almost 19% of all circulating ETH via staking. Its focus for the future, SUAVE, is also attracting much attention. The solution can provide a unified sequencing layer for many layer 2s as they look to become progressively decentralized, solving a critical technical challenge for one of the most hyped areas in Web3. Both the present and future are looking rosy for Flashbots.
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INVESTING: Metaverse Giant Animoca Brands Plunges $30MM Into Crypto 'Super App' hi (link here)
Metaverse gaming company Animoca Brands has invested $30MM in Web3 neobank "hi," founded by Sean Rach, the former CMO of Crypto.com. Before the investment, "hi" had partnered with Mastercard to launch a debit card that allowed users to customize avatars using their own NFTs.
As for Animoca, the company had initially announced the development of the Animoca Capital fund with a goal of $2B in November. However, in January, they scaled down this target by 50% and have just reduced the target by an additional 20%, settling at $800MM.
The "hi" platform offers crypto trading via credit card and bank transfers. Current listed tokens include BTC, ETH, SOL, and 100+ cryptocurrencies. The neobank offering also provides instant fiat top-ups, and fee-free money transfers. Currently, "hi" has 3.6MM members and is in phase one of its plan.
During phase one, which is slated for completion within the next 18 months, "hi" intends to introduce equity, ETF, crypto derivatives trading, and venture into Gamefi. The fintech also needs to address several highlighted challenges include KYC problems, the 40% annual yield generated on their native token, and concerns about the legitimacy of Google Play and App Store reviews.
Phase two will introduce DEhi, a decentralized non-custodial wallet, for holding and accessing NFTs and dApps. "hi" also plans to unveil the “hi Protocol” (hiP), a Layer-2 Sidechain for Ethereum that boasts scalability, EVM compatibility, and a proof-of-humanity identity (PoHI) mechanism. At the core of PoHI is a Zero Knowledge Set Membership (ZKSM), which leverages ZK technologies to identify users without revealing their identities.
We see “hi”’s neobank infrastructure as the main motivation behind this investment. Animoca’s users will be able to make direct transactions with tokens from within the ecosystem, such as Sandbox’s SAND token. “hi” debit cards can be used to trade these tokens online or in real life, and the wallet can build on its Gamefi specific functionality, similar to its customizable NFT avatars feature.
For Web3 as a whole, we emphasize the need for secure banking infrastructure, which should precede ventures into gamified financial projects. The negative reviews on “hi” exemplify the importance of establishing a reliable foundation and also the nascent stage of Web3 banking. If “hi” is to establish itself as a prominent player in this area it has issues to address on its KYC processes. But if it can effectively leverage PoHI and this partnership with Animoca effectively it could become a hallmark for banking in the age of Web3 gaming.
👑 Related Coverage 👑
Curated Updates
Here are the rest of the updates hitting our radar.
Financial Institutions and Adoption
DCG Says It's Close To Reaching Agreement On Genesis Chapter 11, Appoints New CFO - The Block
WisdomTree To Leave ‘No Stone Unturned’ With New Blockchain-Native App - Blockworks
DeFi and Digital Assets
⭐ DeFi Exchange Curve Finance Confirms Various Ethereum Pools Hacked & Justin Sun, DCF God And Others Line Up To Buy Curve Finance Founder’s CRV Token - Decrypt
⭐ PancakeSwap To Share Trading-Fee Revenue With CAKE Token Stakers - The Block
dYdX Proposal To Slash Token Issuance Wins Early Support - CoinDesk
zkSync Era welcomes PancakeSwap to the ecosystem - Blockworks
Arkham Bounty Unearths $160MM In Alleged Terra Wallets - The Defiant
Blockchain Protocols
⭐ Gitcoin's Layer 2 'Public Goods Network' Goes Live On Mainnet - The Block
Celo Network Welcomes Google Cloud Validator To Its Network - Blockworks
SHIB Devs Begin Testing Shibarium To Ethereum Bridge - Decrypt
NFTs, DAOs and the Metaverse
Gucci Reveals Rewards for Vault Material NFT Holders - Decrypt
Arbitrum DAO’s First Grants Programs Take Shape - CoinDesk
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