Multicoin Capital, a crypto-focused investment company, led a $2.3M seed funding round to FastLane Labs. The protocol is a maximum extractable value (MEV). Multicoin is raising funds for the third time to support infrastructure for MEV. MEV is a controversial method for validators earning more money by ordering transactions onto a blockchain.

The MEV allows miners and validators to make money from the way a blockchain transaction is organized or ordered before it becomes a block. MEV earning methods vary depending on the blockchain, but traders tend to focus on high volumes of attempts or spamming in order to maximize profit potential.

FastLane Labs, founded in March 2022 by FastLane Labs, provides an auction system which allows validators to earn rewards without having to spam the Blockchain. Polygon validators receive their tips from traders competing to secure specific blocks in the native token MATIC. To minimize duplicate transactions, the auctions are conducted off-chain. FastLane is different from other Polygon protocols because it allows validators to continue using their existing Polygon clients rather than downloading proprietary software, FastLane CEO Alex Watts explained in an interview with CoinDesk.

Learn more about MEV or Maximal Extractable value.

Watts said that they had not originally planned to raise capital. Watts continued, “We had planned to bootstrap our way through the entire process… then we were approached Multicoin Capital and they pitched us some ideas that we found really fascinating.” “We realized by working with Multicoin Capital and raising capital, we would be able to become much bigger than what we originally planned.”

Watts stated that the talks with Multicoin began in late August last year when FastLane did not have a corporation, or even a presentation deck to show potential investors. FastLane’s legal team had plenty of time to set up the necessary infrastructure during the long fundraising period. Polygon Ventures was also a participant in the round, as were Shima Capital and Delphi Ventures. Everstake Ventures participated, along with a41 Ventures.

Multicoin Capital led the $17.4million round in September 2021 for Eden Network. This multi-chain infrastructure is designed to reduce the negative effects of MEV. The firm co-led a 10 million round in August last year for Jito Labs. This infrastructure provider focuses on Solana based MEV.

Shayon Sengupta said in a press release that as DeFi on Polygon continues its growth, more MEV opportunities will emerge. “Polygon FastLane is the best way for anyone to gain exposure to DeFi activities within the Polygon eco-system… MEV protocol do more than just create revenue streams for validaters; they’re now critical infrastructure which helps maintain the stability of any network.”


Updated (UTC 1630): This update corrects the third paragrah to reflect that only traders, and not validators, can spam a system.

Stephen Alpher edited the book.