Warlock Labs Secures $8 Million in Funding for On-Chain Trading Solutions
Market-making on-chain trades is critical but often underutilized. Grug, a pseudonymous trader, highlights that crypto protocols miss out on potential revenue from valuable order flow.
Key developments include:
- Grug's company, Warlock Labs, raised $8 million in venture funding aimed at addressing these issues.
- The firm plans to utilize on-chain data to ensure responsible processing of order flow.
- Warlock Labs will engage with Ethereum's trading infrastructure, where operators offer kickbacks for processing order flow, potentially generating millions annually.
- Concerns exist regarding the manipulation of trades within the maximal extractable value (MEV) framework, which can harm protocols and traders.
- Warlock Labs is developing tools and a builder with zero-knowledge guarantees to verify that submitted order flow remains untampered.
- Future expansion may include market making for centralized exchanges (CEXes), addressing issues like those seen recently with Binance's MOVE token controversy.
- Grug emphasizes the importance of proving ethical handling of order flow, suggesting it will drive more submissions to their platform.
- Polychain Capital led the funding round, joined by other investors like Greenfield Capital and TRGC.