Sorella Labs Raises €7.5 Million, Focuses on Two Ethereum MEV Solutions Brontes and Angstrom

This article is reproduced from ChainFeeds, with the original title ""Paradigm's Lead Investment in Sorella Labs: Competitor or Ally of Flashbots?" by author 0xNatalie

Sorella Labs announced yesterday that it has completed a $7.5 million seed round of financing, led by Paradigm. Other participants include Uniswap Ventures, Bankless Ventures, Robot Ventures, and Nascent. Sorella Labs is a crypto startup dedicated to solving the MEV problem in the Ethereum ecosystem.

Overview of Core Tools

Sorella Labs is developing two core tools:

• Brontes: An open-source blockchain analysis tool that processes Ethereum block data, categorizes transaction behaviors, and identifies MEV through pattern matching and analysis. It can be seen as an open-source Etherscan with custom block analysis capabilities. Brontes has been launched today and is open for use.

Specifically, Brontes categorizes transactions based on specific behaviors, including transaction initiators, recipients, transaction amounts, Gas fees, etc. It transforms raw Ethereum blockchain data into a structured, easily analyzable format, greatly simplifying the data preprocessing process. Additionally, Brontes integrates off-chain data (such as centralized exchange prices, metadata, peer-to-peer data, etc.), making the analysis more comprehensive and accurate. To meet the needs of different users, Brontes provides a modular framework where users can create and apply different analysis methods according to their needs. This makes Brontes a highly open tool suitable for complex blockchain data analysis.

• Angstrom: A tool designed to reduce common arbitrage behaviors in decentralized exchanges, planned to be launched as a hook for Uniswap V4. Uniswap V4 introduces new features including hooks, singleton design (all liquidity pools managed by a single contract), and support for native ETH trading pairs, expected to go live in the second half of this year. In V4, a hook is a customizable smart contract bound to a liquidity pool, allowing developers to execute custom code at specific points in the liquidity pool lifecycle, enabling complex logic and functionality. As a hook, Angstrom will run a double auction mechanism within each block through Sorella's off-chain network.

First auction: The purpose is to determine which transactions can be processed first within a block. Transaction order is typically determined by Gas fees and submission time, easily exploited by front-runners who ensure their transactions are executed before large trades by paying higher Gas fees to profit from price changes caused by large transactions. The first auction of Angstrom is a fair auction, where even front-runners attempting to insert their transactions need to compete for priority through the auction mechanism. Thus, attackers can no longer solely ensure their transactions are processed before large trades by increasing Gas fees or submitting transactions quickly.

Second auction: It is a batch auction where all orders are executed at the same price point, avoiding drastic price fluctuations caused by single large trades, preventing sandwich attacks and general arbitrage behaviors, further enhancing protection.

Sorella Labs vs. Flashbots

Flashbots and Sorella Labs have similar goals but differ in specific implementation and target users, forming a complementary relationship.

Flashbots focus on solving the MEV problem at the Ethereum protocol level, aiming to achieve fairer and more transparent MEV extraction by optimizing the operations of miners and validators. Flashbots has introduced tools like MEV-Boost to establish a standardized MEV auction system, reducing malicious competition in the network, ensuring miners and validators can extract MEV in a fair environment. These tools not only reduce unfair competition among validators but also mitigate the negative impact of MEV. Flashbots' core goal is to enhance the overall security and transparency of the Ethereum network, creating a fairer competitive environment for participants.

Sorella Labs, on the other hand, focuses on MEV mitigation at the application level, developing tools like Brontes and Angstrom that act directly on the DeFi application layer, aiming to reduce losses for liquidity providers and improve the quality of user transaction execution. Sorella Labs' core goal is to protect the interests of DeFi users by improving transaction fairness and efficiency at the application layer.