Web3 is meant to usher in a new era for the internet. More accountable and open, it promises to make our networked world more trustworthy and inclusive. But in recent years, the technology that powers Web3 has become increasingly complex. This is especially true in the case of blockchain, the ledger that records transactions for participants in the decentralized finance (DeFi) ecosystem, and the transactions finished by complex interactions of smart contracts, the “lego” of DeFi.
All this complexity, in turn, makes it harder to discover DeFi trading strategies, as exemplified by how difficult it is to decode and calculate Maximal Extractable Value (MEV), a measure of the value that can be extracted from a blockchain network. For DeFi and Web3 to flourish, we must tame the intrinsic complexity of smart contract trades and make transactions like MEV more transparent for stakeholders, including analysts, institutions, and traders.
This was the motivation that led me to found Eigenphi. In the past two years, we have developed market-leading transaction analytical tools detailing MEV and liquidity on-chain data, as well as bespoke research that enables DeFi stakeholders to understand blockchain behaviors, structures, and affiliations that affect their interests. For example, we are currently providing MEV evaluation to one of the biggest crypto wallets, empowering their MEV-aware design of order-flow processing. Our approach enhances execution qualities for order flow auction providers, and we’re excited to share our appreciation for DeFi to crypto communities.
A compact team with global reach
We’re a small startup with 20 people. Most are based in Beijing, but we have small teams in the U.S., Canada and Singapore serving audiences in Asia, Europe, and North America. Our IT infrastructure must be equally global, which is one of the reasons that we decided to migrate our systems to Google Cloud, which is available in most regions and delivers industry-leading availability and security.
Another reason for migrating to Google Cloud is that we process massive volumes of trading data for real-time tables and charts on our website. Our algorithms untangle dozens, sometimes hundreds, of transfers in one transaction. This process requires fast and reliable data crunching abilities such as those provided by Google Cloud’s data management and analytics tools: BigQuery,Bigtable andCloud Spanner for data storage, andDataFlow andPub/Sub for data streaming and processing. We also useFirebase for application development andCloud Functions to run our code.
The Google for Startups Cloud Program also gave our business a boost. We got firsthand guidance from Google Cloud experts who helped us migrate to the cloud and select the tools that best matched our data processing needs. They also connected us with the wider Google Cloud community so that we could speak at conferences, boost our marketing, and get advance notice of new Google Cloud features and releases.
Participants in the Google for Startups Cloud Program can also access Google Cloud credits for many products and tools. This helped reduce financial pressure at a time when we needed to grow fast and demonstrate success to our investors. Another financial advantage is that we didn’t need to invest in an infrastructure team, keeping down our staffing costs. Google Cloud provides the infrastructure and support we need.
Although it’s still early days, the results are beyond our greatest expectations. Because we can focus on business and innovation, we have reduced our costs by 70 percent and cut deployment time by 90 percent. Now we see potential forVertex AI and other Google Cloud machine learning tools to uncover more insights in our blockchain data. In addition, we saved 60% of cost and achieved 2x efficiency moving from a data pipeline based on virtual machines (VMs) to Compute Engine. We’re thrilled with the benefits of a modern cloud-native architecture vs. a traditional implementation.
Advice for aspiring entrepreneurs
We are a highly specialized organization, but there are two important lessons that other entrepreneurs can take from our experience. The first is that no matter how attractive your business model is, it means nothing if you can’t find or afford the technology to make it a reality. We had a clear vision for analyzing transaction data generated by blockchain to reveal the value inside, but this required vast amounts of data storage and processing, mostly in real time. Google Cloud provided the best, most affordable tools for the job.
The second is to stay focused. When we first started, we were slightly distracted by all the business opportunities that blockchain data offers. We had to make a firm decision to focus on analytical tools that measure MEV as the entry point of liquidity trading. This is also where Google Cloud played a critical role. By taking care of the infrastructure and reducing costs, we were able to concentrate on innovation and shortened our time to market.
Eigenphi now enjoys a reputation as an extremely high-quality blockchain transaction analysis tool for the Web3 community, helping DeFi stakeholders such as order flow originators and order flow auction providers protect and grow their revenues. This is no small achievement, but Google Cloud helped make it possible. From its technology to its people, it offers an amazing ecosystem of resources for any startup to reduce costs and gain a competitive edge, whatever their area of business expertise. We’re excited to continue the partnership to innovate and develop new ways to help stakeholders expand their revenue goals.
Cloud BlogRead More