Three months ago, Ethereum successfully completed a merge, moving to an energy-saving proof-of-stake consensus model, fundamentally changing the ecosystem of the second largest blockchain.
Blocknative, a San Francisco-based Web3 infrastructure company, utilizes a new system of “block builders,” providers that determine which transactions to include in a block and in what order.
According to data analytics tool Relayscan.io, Blocknative has become one of the most prolific block builders with over 10% of the network.
Four-year-old Blocknative previously operated as a SaaS business, providing blockchain transaction management and monitoring services. With his new $15 million funding round, Blocknative is looking to build a viable standalone block-building business in the new Ethereum ecosystem.
Blocknative CEO and co-founder Matt Cutler said: “The economics of this are just beginning to materialize.”
This is exacerbated in the volatile cryptocurrency industry at a time when venture capital funding has plummeted across the board, but infrastructure companies like Blocknative are still looking for investors. One of the VCs participating in this round is Blockchain Capital, where he led a $15 million Series A for crypto accounting startup Bitwave in early December.
Blockchain Capital General Partner Spencer Bogart said: “The merge marks a new era for Ethereum and a huge opportunity for block natives.”
Much of the money contributing to Blocknative’s funding comes from native Web3 funding, which Cutler said shows a commitment to the ecosystem.
“Traditional VCs have started to dabble, but we hear them pull away,” Cutler said. luck. “If you believe in the long-term value of Web3, you know infrastructure matters.”
Cutler wants block building to be the core of the block-native business, but admits that profit margins are still unknown. He said the company currently only makes a portion of ETH when it gets a block.
With the new funding round, Blocknative aims to become more competitive in the ecosystem to acquire more blocks and find margins more efficiently in an “ecosystem-tailored” manner.
As discussions around concepts such as Maximum Extractable Value (MEV) and censorship grow in the Ethereum community, companies like Blocknative could prove vital in that move forward.
“It’s a high-profile role and a very interesting place,” said Cutler. “We help determine what goes down the chain.”
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