The Future of Block Building: Commodity or Competitive Moat?

Running a vanilla builder on AWS is a race to the bottom. Profits are extracted by searchers and validators, leaving builders with <5% of total MEV value.\n- Zero Differentiation: Any team with a Geth fork can compete.\n- Price Takers: Revenue is dictated by validator relay auctions.\n- Unsustainable: Margins collapse as more generic builders enter.

Control the full stack from searcher to validator. Jito's dominance proves the model: bundle the solver network (searchers), block builder, and staking pool.\n- Capture Full Value Stream: Retain >50% of MEV via integrated services.\n- Network Effects: More searchers → better blocks → more validators → more revenue.\n- $1B+ TVL in Solana stake demonstrates validator lock-in.

Move beyond transaction bundling to solving user intents. This shifts competition from speed to optimization, requiring deep solver networks and cross-chain liquidity.\n- Higher-Order Logic: Solvers compete on fulfilling "swap this for that best price" across UniswapX, CowSwap, Across.\n- User Experience as Moat: Abstracted complexity creates sticky demand.\n- Future-Proof: Aligns with account abstraction (ERC-4337) and cross-chain intents via LayerZero, Chainlink CCIP.

Commoditize the base layer and own the encrypted mempool. SUAVE aims to be a decentralized, cross-chain block building marketplace, making privacy and neutrality core features.\n- Decentralized Mempool: Break the Flashbots Relay monopoly with a credibly neutral alternative.\n- Cross-Chain Scale: Build blocks for Ethereum, Arbitrum, Optimism from a single platform.\n- Programmable Privacy: Enable complex MEV strategies without frontrunning via encrypted orderflow.

Jito turned Solana's chaotic mempool into a structured market. By bundling MEV extraction with priority fees, it created a predictable economic layer for validators and users.

• Captures >90% of Solana MEV via its dominant client.
• $1B+ in total value extracted and redistributed to stakers.
• Proves a builder can become a core protocol primitive, not just middleware.

The problem is fragmented liquidity and opaque MEV across Ethereum, rollups, and alt-L1s. SUAVE aims to be the decentralized mempool and block builder for every chain.

• Decouples preference (intent expression) from execution (block building).
• Enables cross-domain arbitrage as a native primitive.
• If successful, it commoditizes individual chain builders by owning the order flow source.

On Ethereum, a tripoly of builders (Flashbots, bloXroute, beaverbuild) consistently produce >80% of post-merge blocks. This recreates the miner centralization problem at a higher, more sophisticated layer.

• Censorship risk: Builders can exclude OFAC-sanctioned transactions.
• Extraction efficiency: Top builders have proprietary data and algorithms, creating a feedback loop of dominance.
• The 'competitive moat' is real-time data and exclusive order flow deals.

Ethereum's endgame is to formalize the builder market in-protocol, making block building a permissionless, auction-based commodity. This neutralizes builder centralization risks.

• Credible neutrality: Validators (proposers) are forced to choose the highest-paying, censorship-resistant block.
• Specialization without centralization: Builders compete purely on technical and economic efficiency.
• Turns the builder role into a low-margin, high-volume commodity service.

The next battleground is integrating block building with restaking. Entities like EigenLayer allow builders to create vertically integrated stacks that combine staking capital, execution, and MEV capture.

• Slashing for builder misbehavior becomes possible, increasing trust.
• Builders can offer higher yields by capturing and sharing more MEV, attracting more restakers.
• This could bypass PBS by aligning builder and proposer interests within a single ecosystem.

Today's builder advantage (data, relationships, algorithms) is a competitive moat. Long-term, protocol design and cryptography will commoditize the role.

• Short-term (1-2 years): Builders with exclusive order flow (via wallets, dApps) or superior cross-chain tech (like SUAVE) win.
• Long-term (5+ years): Enshrined PBS, encrypted mempools, and intent-based architectures (UniswapX, CowSwap) reduce builders to low-fee utilities. The moat becomes a ditch.

Proposer-Builder Separation (PBS) standardizes the interface, making the builder role a pure execution layer. This invites hyper-competition on thin margins, eroding the value of complex software stacks.

• Standardized APIs reduce switching costs for validators.
• Open-source builder code (e.g., from Flashbots) lowers the barrier to entry.
• Profit margins compress towards the cost of raw block space and latency.

Flashbots' SUAVE aims to decentralize and democratize the entire MEV supply chain. If successful, it fragments the builder market and captures its value at the mempool and solver layer.

• Universal preference environment bypasses exclusive order flow deals.
• Cross-chain intent settlement commoditizes individual chain builders.
• Builders become interchangeable execution units for SUAVE's decentralized network.

The future is application-specific blockchains and intent-based architectures. This shifts competition from generic block building to specialized settlement and execution environments.

• Rollup-as-a-Service (e.g., Conduit, Caldera) lets apps own their block space.
• Intent-based protocols (UniswapX, CowSwap, Across) bypass the public mempool, sourcing liquidity directly.
• The value accrues to the application layer and its solvers, not the generic L1 builder.

The ultimate commoditizer is physics. When software optimizations plateau, competition reduces to a capital-intensive hardware war, favoring a few players with colocation and ASICs.

• Sub-100ms latency requires bespoke hardware and direct validator relationships.
• Economies of scale create natural oligopoly, not a long-tail of builders.
• The moat becomes capital expenditure, not algorithmic intelligence.