Sorella Labs Seed Funding Announcement

Sorella Labs, a crypto startup focused on developing tools to address Ethereum’s maximal extractable value (MEV) problem, has successfully raised $7.5 million in a seed funding round.

Funding Details

Paradigm led the funding round, with participants including Uniswap Ventures, Bankless Ventures, Robot Ventures, and Nascent. Although the firm closed the seed round last September, they have officially announced the funding as they emerge from stealth mode, with one of their MEV tools now operational. Co-founder and CEO Ludwig Thouvenin declined to discuss the specifics of the seed round, such as valuation or investor board involvement.

Thouvenin co-founded Sorella Labs in 2022 along with Karthik Srinivasan, both university dropouts who met at the University of Chicago. Their growing interest in blockchain technology led them to leave university and establish Sorella.

About Sorella Labs

Sorella Labs is dedicated to creating solutions for the MEV issue on Ethereum. MEV refers to the profits that validators or bots can extract by manipulating transaction orders within a block. Common strategies involve front-running, sandwich attacks, and arbitrage, all of which can increase costs for DeFi users and create disadvantages for those with fewer resources.

Thouvenin stated that since Ethereum’s Merge upgrade in September 2022, over $855 million has been lost to MEV actors, according to their internal analysis.

Tools in Development

To combat MEV losses, Sorella Labs is developing two tools: Brontes and Angstrom.
– Brontes is an open-source blockchain analytics tool that estimates MEV by processing and analyzing Ethereum blocks. It functions similarly to Etherscan but emphasizes custom block analysis.
– Angstrom, set to launch with Uniswap V4, will facilitate two auctions per block to execute trades fairly and minimize common arbitrage tactics.

Competitive Landscape

Sorella Labs is compared to Flashbots, another Paradigm-backed firm also targeting Ethereum’s MEV issue. Flashbots targets MEV infrastructure at the protocol level, whereas Sorella aims to address it at the application layer. Thouvenin emphasized their collaborative relationship with Flashbots.

Currently, Sorella Labs employs about 15 individuals but plans to expand by hiring MEV researchers, Rust developers, and systems engineers.

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