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New York, NY – March 27, 2025 – Warlock Labs, a pioneering DeFi infrastructure provider, has announced the successful closure of an $8 million seed funding round. The round was led by Polychain Capital, with significant participation from Greenfield Capital, Reciprocal Ventures, Symbolic Capital, Ambush Capital, and TRGC. This investment will fuel Warlock's mission to disrupt the current on-chain order flow landscape and return value to decentralized protocols.
Warlock Labs addresses a critical challenge in the DeFi ecosystem: the dominance of a builder duopoly that controls a staggering 90% of Ethereum blocks. This concentration of power allows these entities to extract billions of dollars in value from protocols and users, creating an extractive economy that hinders the growth and decentralization of DeFi.
"Protocols are losing billions to this builder duopoly," explains Grug, the pseudonymous founder of Warlock Labs. "This centralization has created an extractive economy where value flows away from those who create it. We're here to change that."
Warlock Labs offers a solution: an ethical recapture system that returns value to its originators. Their proprietary trading firm utilizes on-chain data and zero-knowledge proofs to ensure responsible order flow processing. This innovative approach offers several key advantages:
Value Recapture: Warlock unlocks and returns the value of protocol order flow to the protocols themselves, boosting their revenue by more than 20%.
- Enhanced Revenue: By recapturing lost value, Warlock provides protocols with a significant new revenue stream, increasing their sustainability and growth potential.
- Duopoly Disruption: Warlock's ethical searcher-builder model challenges the existing power dynamics, fostering a more competitive and decentralized market.
- Improved User Experience: By optimizing bundle construction and routing, Warlock minimizes gas inefficiencies and slippage, leading to a better user experience and increased capital efficiency.
- Transparency and Trust: Zero-knowledge proofs provide verifiable guarantees that order flow is handled responsibly and without manipulation, building trust and transparency within the DeFi ecosystem.
Warlock Labs' core technology, known as "Shackleton," is a cutting-edge searcher-builder designed to reclaim MEV (Maximal Extractable Value) for originators. Shackleton incorporates advanced MEV detection systems, optimized execution strategies, and a fair value distribution mechanism. Key features of Shackleton include:
- Deep Coverage: Comprehensive MEV detection across various DeFi platforms, including DEXs, lending protocols, and concentrated liquidity pools.
- Smart Detection: Sophisticated modeling identifies complex, multi-hop MEV opportunities that other systems miss.
- Fast Execution: Processes billions of state permutations with sub-second latency for optimal value capture.
- Risk Protection: Continuous monitoring and risk management strategies prevent volatility events from impacting protocol solvency.
- Easy Integration: Streamlined APIs and white-glove support ensure quick and seamless integration for protocols.
Warlock Labs' commitment to decentralization extends beyond their technology. They are actively contributing to the Zero-Knowledge (ZK) ecosystem, pushing the boundaries of privacy and scalability in blockchain technology. Their ongoing research and development efforts are documented and shared publicly, fostering transparency and collaboration within the community.
"We're going to live in a future where order flow is alpha, and proving you didn't abuse it is as valuable as actually receiving it," Grug emphasizes. "If you can prove that you will never tamper with order flow, it's more and more likely that more and more people will submit their order flow to you."
Warlock Labs has identified Wintermute, a leading market maker, as their primary competitor. However, they believe their focus on ethical MEV recapture and commitment to decentralization positions them uniquely in the market. With the backing of prominent investors and a strong technological foundation, Warlock Labs is poised to revolutionize on-chain order flow and empower the next generation of DeFi protocols.
About Warlock Labs:
Warlock Labs is a DeFi infrastructure provider building an ethical recapture system for on-chain order flow. Their mission is to return value to decentralized protocols and foster a more equitable and decentralized DeFi ecosystem.
For more information, visit https://www.warlock.xyz/.
Compiled by CMO Intern team
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