Flood, a decentralized exchange aggregator focused on the Ethereum ecosystem, has raised $5.2 million in a seed funding round.
Bain Capital Crypto led the round, with participation from Archetype and Robot Ventures, Flood said Thursday. The round closed in the summer of 2023, Flood co-founder and CEO Francesco told The Block, adding that it was structured as equity with token warrants. He declined to comment on the valuation, but said there was a “small” funding round a year ago with the same investors and a few angel investors.
Francesco, a former software engineer at UMA Protocol, declined to give his and co-founder Jiang's full names. Flood said Jiang is a crypto developer and the author of Neuronika, a Rust machine learning library.
As part of leading the round, Bain Capital Crypto has secured one observer seat on the flood, Francesco said.
What is a flood?
Flood is a DEX aggregator currently running on Arbitrum One and plans to expand to Ethereum, Base, and Optimism in the coming months.
Francesco said Flood's key unique proposition is optimal routing to close deals at the mathematically best price. “Most aggregators are moving towards his RFQ [request for quote] model; we believe this is a sub-optimal model because people can collude to get deals done at bad prices,” Francesco said.
In the future, Flood users will be able to independently verify whether they received the best price using easy-to-calculate evidence, Francesco said. “This is similar to what is done in zero-knowledge proofs. It's easy to verify the proof, but it's not easy to generate the proof,” he said, adding, “We do some custom calculations. I'm still figuring it out,” he added.
Flood also operates its own DEX, FloodSwap. Flood went live last November and had more than $1.3 million in trading volume, according to Dune's data dashboard.
Gasless trading and MEV free features
Francesco said other key features of the flood include gasless and maximally extractable valueless transactions.
“Flooding is completely intent-based, meaning users express their desired outcome and the fulfillment company executes the transaction at the best price. This means users do not have to submit transactions themselves. “Instead, users can simply sign a message asking them to pay their gas bill directly,” he pointed out. “And our routing is optimal, so trading in the flood does not open the door to profitable backrunning.”
According to Francesco, if there is arbitrage in the network when a Flood user trades, the Flood's best enforcer will try to capture it and return it to the user in the form of “surplus.”
According to the Dune dashboard, Flood users earned more than $8,000 in surplus last month.
Francesco said Flood remains focused on the Ethereum ecosystem in the short term, but is open to exploring more chains in the future.
Six people currently work at Flood, and with new funding available, Francesco said the project plans to hire more people across its business development and engineering departments.
This article has been updated after Flood said Bain Capital Crypto solely led the round, with Archetype also participating.
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