Jito Labs, a crypto startup building infrastructure to mitigate the negative impact of maximum extractable value (MEV) on Solana, has raised $10 million in a Series A funding round.
Sharing the news exclusively with The Block on Thursday, Jito Labs said Multicoin Capital and Framework Ventures co-led the round. Other investors included Alameda Research, Solana Ventures, Delphi Digital and Robot Ventures.
Angel investors, including Solana Labs co-founder Anatoly Yakovenko, Coral founder and former Alameda Research engineer Armani Ferrante and Solana Foundation's head of communications Austin Federa also backed the round.
MEV refers to the maximum value that can be extracted from block production over the standard block reward and gas fees by including, excluding, and changing the order of transactions in a blockchain. Jito Labs is building tools to enable Solana validators and stakers to gain MEV as opposed to trading bots, co-founder Lucas Bruder told The Block.
Trading bots often run algorithms to detect MEV opportunities and capture them. On Ethereum, for example, nearly $675 million in MEV has been withdrawn since January 2020, according to data from Flashbots, a research and development organization that works to mitigate the negative impact of MEV on Ethereum. On Solana, that figure is around $60 million for this year thus far, said Bruder. As Solana's ecosystem grows, it will result in higher MEV, according to Bruder.
Among Jito Labs' tools is the first third-party validator client for Solana called Jito-Solana, which it says will help validators and stakers earn more rewards using a bot mitigation system.
Jito Labs can be compared with Flashbots. Like Flashbots, Jito Labs will also offer "bundles" to group transactions in order to reduce network congestion and fees.
Overall, Jito Labs aims to improve the speed and finality of transactions on Solana as well as rewards for validators and stakers. The infrastructure the firm has developed is currently being audited by Neodyme and is expected to go live within the next two months, said Bruder.
There are currently six people working for Jito Labs and Bruder plans to hire around five more people in the near future.
The Series A round brings Jito's total funding to date to $12.1 million. The firm previously raised $2.1 million in seed capital which hadn’t been announced before today.
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