Eden Network, a priority transaction network for Ethereum that provides protection against miner extractable value (MEV) and arbitrary transaction reordering, has raised $17.4 million in a seed funding round.
The round was secured via selling EDEN tokens, Caleb Sheridan, a core developer of Eden Network, told The Block. Multicoin Capital led the round, with Jump Capital, Alameda Research, Wintermute, GSR, and DeFiance Capital also participating.
Angel investors, including Andre Cronje, founder of Yearn Finance, and Joshua Lim, head of derivatives at Genesis Capital, also backed the round.
The fresh capital injection will help Eden Network strengthen its infrastructure through research and development and further grow its adoption, said Sheridan.
Eden Network, a priority transaction network that protects Ethereum traders from arbitrary block reordering, said today it has raised $17.4 million in funding.
The seed round was led by Multicoin Capital and included Jump Capital LLC, Alameda Research, Wintermute Trading Ltd., GSR and Defiance Capital.
Eden provides private and priority transactions for traders and miners on the Ethereum blockchain to help deal with an issue known as “miner extractable value” or MEV. Because miners choose transactions from the public mempool — the queue in which all transactions await to be added to blocks on the blockchain — they can also pick which order they are being added to blocks and can exploit their execution order.
For example, an investor could see an arbitrage opportunity between exchanges for a pair of tokens and then decide to execute the trade on the open network.
Eden Relay Remote Procedure Call that allows transactions to be submitted privately from the public Ethereum mempool.
More sophisticated traders and applications will also have access to Eden’s “Slot Tenant” auctions. These processes transactions on one of the three top slots of every Ethereum block and make certain that they have priority above all other parties in Eden blocks.
The company claims this will help avoid malicious MEV actors including bots and miners attempting to steal arbitrage opportunities.
The Eden Network is currently supported by some of the largest Ethereum mining pools in the world, including Sushi, Band Protocol, Alpha Finance Labs and Bancor.
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We don’t know when ETH 2.0 is going to happen or what it will look like. But Eden is designed to be flexible and compatible with any of these future stakes of the world,” he said to blockworks.
Rocket Dollar’s $8M Series A
In other news, Rocket Dollar, a self-directed retirement platform, raised $8 million in Series A financing in a round led by Park West Asset Management.
Additional investors include Hyphen Capital, Moneta Venture Capital, Kraken Ventures, and Primetime Partners as well as an existing investor, Sure Ventures, also joined in the round.
The company has over $350 million in customer assets and said it will use the funding to accelerate product development, enhance customer experience and focus on cybersecurity, investment education and content to help investors understand the retirement investing ecosystem.
What is Eden Network?
That’s where Eden Network, formerly known as Archer DAO, hopes to remedy the situation.
As DeFi grows, so too does investors’ awareness of MEV.
Joshua Lim, an investor in Eden Network and Genesis Trading’s head of derivatives, said that “for institutional DeFi participants, the market for MEV is becoming as critical as spot liquidity and depth.”
Eden Network is an ordering protocol in which users can execute transactions without fear of being front-runned, but it also helps block producers continue to earn from their status within the network. This behavior is aligned by staking the protocol’s native EDEN token or by becoming a Slot Tenant, and giving an application’s community stress-free trading.
SushiSwap, the popular decentralized exchange, has integrated with the Eden Network to do precisely this.
According to Eden Network’s website, Eden blocks represent 53.33% of the participating hashrate, which means it represents more than half of the network’s hash power on Ethereum.
“MEV is a big problem. It’s specifically the malicious MEV that’s a problem,” Tushar Jain, managing partner at Multicoin Capital said in an interview with Blockworks.
“If the price of an asset is different between Uniswap and SushiSwap, there is a guaranteed profit to be made by the first trader who can execute the arbitrage,” Jain said in a blog post. “The block producer for each block chooses which transaction is going to be first in that block and can decide who will earn this arbitrage profit. MEV can be defined as the sum of guaranteed on-chain profits that block producers can claim,” Jain added.
Analysts have previously discovered that Ether block tampering as a method to attack some Decentralized Finance protocols, which was revealed by Cointelegraph revealed in October 2020. Following the Ether’s London hard fork, some mining pools had begun to use MEV to improve their net income. This action might directly contradict EIP-1559’s claim of decreased gas prices.
Nonetheless, the expectation and activation of the Ether’s London hard fork had indeed been largely supportive for ETH.
The other week, the 2nd-biggest digital currency surpassed $4k for the very 1st time ever since the May of 2021. Bloomberg lead commodities analyst Mike previously informed Cointelegraph that $5k Ether is probable very soon.
Unfortunately, not all things are equal as many traders, especially those within the world of decentralized finance (DeFi), will increase gas fees associated with trades to “frontrun” other transactions.
A miner, behaving according to incentives, will process transactions that earn them the most; in this case, trades with the highest fees attached.
The extent to which transactions can be reordered may even affect the integrity of the Ethereum blockchain.
In aseminal workdiscussing frontrunning and MEV, researchers from Cornell, University of Illinois, Carnegie Mellon University, and ETH Zurich wrote, “high-MEV regimes in general lead to a new attack in which miners rewrite blockchain history to steal funds allocated by smart contracts in the past.”
It’s an extremely cutthroat environment and one which may even dismantle the public good that is Ethereum.
Eden Network provides an additional revenue stream to Eden block producers or miners in the form of EDEN tokens, said Sheridan. Miners that are currently utilizing the Eden Network include F2Pool, SparkPool, Nanopool, and 2Miners.
Eden Network rents prioritized block space in Eden blocks to so-called “Slot Tenants.” That means projects looking to become tenants have to participate in a slot auction where the highest EDEN staker wins. In return, the winning projects or tenants get access to Eden Network for processing their trades with protection from MEV or frontrunning.
Eden Network is a project initiated by the Archer DAO team.
Sheridan said Archer DAO raised $1 million last year via an ARCH token sale.
To that end, the project is also looking to triple its current team of 10 by hiring mostly engineers, he said.
Eden Network went live last month with Ethereum’s London upgrade. Since it is a transaction priority network for Ethereum, Eden helps users prioritize their transactions on the blockchain while providing protection against practices such as MEV or frontrunning. As The Block reported recently, MEV refers to certain kinds of profit-generating opportunities that miners could have by frontrunning their transactions, because they are the ones who choose the order of transactions in a block.
Sheridan said users who stake EDEN tokens get priority in Eden blocks with protection from MEV, improved trade privacy, and better price execution.