What is Sorella Labs?

The On-Chain Solution Focused Company Building an MEV Protection Tool

The Launchy Team
August 21, 2024

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Maximal Extractable Value (MEV) has been a persistent issue in the blockchain space, particularly affecting the integrity and fairness of transactions on networks like Ethereum.

MEV refers to the additional value that can be extracted from block production beyond the standard block reward and gas fees, often at the expense of regular users.

Despite various tools developed to mitigate MEV, the problem continues to pose challenges for both developers and users. Sorella Labs, a company focused on on-chain solutions, is working on addressing the negative impacts of MEV on Ethereum.

What is Sorella Labs?

Sorella Labs is a company focused on providing solutions to address the challenges posed by MEV on Ethereum. Founded by individuals with expertise in blockchain technology, Sorella Labs aims to enhance the transparency and fairness of blockchain transactions.

Recently, the company secured $7.5M in seed funding, led by Paradigm Capital, to support the development of its MEV protection tools. Sorella Labs is developing a suite of tools, including Brontes and Angstrom, each targeting different aspects of the MEV problem.

At its core, Sorella Labs seeks to create an environment that is more equitable for all participants in the Ethereum ecosystem. The company leverages blockchain analytics and other mechanisms to protect users from the effects of MEV.

Sorella Labs approaches the problem with the belief that addressing MEV at a fundamental level could contribute to the overall security and functionality of the Ethereum network.

What is the Problem That Comes with MEV?

MEV is a complex issue stemming from how transactions are ordered within a block on the blockchain. It occurs when block producers, such as miners, reorder, include, or exclude transactions in ways that maximise their profit.

"Someone is losing."
Hear why MEV is an existential blockchain question from @SorellaLabs founder, @0xvanbeethoven.
Hit the link in our bio to find out how Å aims to leverage Uniswap hooks to solve MEV at the dApp layer.
— Bell Curve (@thebellcurvepod)
4:12 PM • Nov 17, 2023

This can result in problems like front-running, back-running, and sandwich attacks, where ordinary users may end up paying more or losing out on potential gains due to these manipulations.

The issue with MEV is that it can undermine the perceived fairness of the blockchain. It creates a situation where those who can control transaction orders can extract value, often at the expense of regular users. This not only affects the integrity of the network but can also erode trust in decentralised systems.

As Ethereum continues to grow, and more users engage with DeFi protocols, the impact of MEV becomes increasingly significant. While various tools and strategies have been developed to mitigate MEV, they often have limited scope and effectiveness, leaving the problem unresolved.

How Does Sorella Labs Tackle the MEV Problem?

Sorella Labs has developed two tools, Brontes and Angstrom, which have the goal of tackling the challenges posed by MEV.

Brontes is a blockchain analytics pipeline designed to simplify the process of handling large amounts of Ethereum data. Built on Reth, Brontes converts raw blockchain data into a more organised and analyzable format.

https://x.com/0xvanbeethoven/status/1825738828193141090

It integrates off-chain data, such as metadata and exchange prices, to provide a more comprehensive analysis. This tool is aimed at researchers and analysts who deal with large datasets, allowing them to focus on developing new methodologies without getting bogged down by data preparation.

Angstrom is designed to manage transactions within decentralised exchanges more effectively. It is a Uniswap V4 hook that introduces a dual-auction system per block: one auction determines transaction order, while the other ensures all transactions in the batch are executed at a consistent price.

This system is intended to reduce the likelihood of front-running and other forms of arbitrage that can skew the market. Angstrom is expected to be deployed on the Ethereum mainnet with Uniswap V4 and may later expand to various Layer 2 networks.

Angstrom’s phased rollout is intended to optimise its functionality across different blockchain environments, with the broader goal of contributing to a fairer trading environment within the Ethereum ecosystem.

The Recent $7.5M Seed Funding

Sorella Labs’ approach to tackling MEV has attracted investment from the blockchain community. In August 2024, the company raised $7.5M in seed funding, led by Paradigm Capital.

Sorella Labs’ Funding

This brings the total amount raised by the company to $8.8M according to Pitchbook, which will be used to further develop Brontes and Angstrom, as well as to expand Sorella Labs’ team and infrastructure.

This funding is intended to accelerate the development of Sorella Labs’ tools and support their deployment within the Ethereum ecosystem. The company aims to continue refining its tools and potentially contribute to the broader health and stability of blockchain networks.

Conclusion

Sorella Labs is one of the companies working to address the MEV problem on Ethereum. Through the development of tools like Brontes and Angstrom, Sorella Labs is attempting to provide solutions aimed at protecting users and enhancing the fairness of the Ethereum network.

With recent funding and a focused approach, Sorella Labs is planning to have an impact on the future of blockchain and decentralised finance, contributing to a more secure environment for all participants.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.