Market makers back ex-Goldman Banker’s Crypto startup focusing on improving DeFi – 24/7 Wall St.

A new crypto startup led by former Goldman Sachs and Robinhood veterans has raised $5 million in a seed funding round backed by key market decision makers, according to Bloomberg. The startup plans to use the funding to facilitate the development of its blockchain and accelerate DeFi transactions.

Sei Labs claims it can reduce DeFi transaction times to 600ms

Sei Labs, a crypto startup founded by former Goldman banker Jeff Feng, pocketed $5 million in a seed company funding round led by Multicoin Capital. The fundraising was backed by top market makers Flow Traders and Hudson River Trading, joining other bigwigs such as Coinbase Ventures, GSR, Tangent, and Delphi Digital, among others.

The startup intends to use the new capital to further develop its blockchain technology which aims to accelerate decentralized finance (DeFi) transactions. To achieve this, Sei Labs will launch a protocol including an integrated order book that allows DeFi firms and institutional market makers to manage transactions at faster speeds.

Fast growing DeFi apps, primarily powered by Ethereum or Solana, frequently face network congestion issues that prevent market makers from being able to consistently place orders. Sei Labs is looking to solve this problem with its own technology, which is expected to launch later this year.

Sei Labs’ infrastructure is based on code from the Cosmos blockchain, which the startup claims will reduce transaction times to 600 milliseconds. This compares to 12-14 seconds it takes to make a transaction on Ethereum, the largest protocol in the world to develop DeFi applications.

Dan Edlebeck, ecosystem manager at Sei Labs, said current DeFi transaction speeds are “a deal breaker.” Since the startup’s infrastructure was built primarily for trade facilitation, its co-founder Feng hopes the protocol will overtake Solana in the future.

“Because we’ve built the whole chain around a backlog, all the things that Solana could but won’t do because it has a ton of other games and other use cases, we’re able to do.”

– Jeff Feng, co-founder of Sei Labs

A difficult year for DeFi

Sei Labs’ funding round comes amid a critical period for the DeFi space, which has faced serious challenges over the past year, primarily due to an increase in cyberattacks. A recent research report showed that attacks against DeFi protocols climbed 1330% in 2021.

Last month Solana-based protocol Nirvana Finance suffered a flash loan attack which resulted in a nearly $3.5 million feat. The attack led to a massive crash of Nirvana’s native ANA token and NIRV stablecoin, similar to that seen in TerraUSD and LUNA earlier this year.

Multicoin Capital, the funding leader of Sei Labs, is also a major investor in Solana. Other crypto projects in its portfolio include Aaave, Binance Coin, The Graph, Helium, and more.

This article originally appeared on The Tokist