MEV-Boost is a market patch, not a protocol solution. It separates block proposal from block building, creating a new market for searcher-builder cartels like Flashbots and bloXroute to compete on execution quality. This outsources complexity but creates systemic fragility.
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Why MEV-Boost is a Temporary Fix for a Permanent Problem
MEV-Boost mitigated validator centralization but created a new, opaque builder oligopoly. This analysis argues it's a stopgap that fails to address the fundamental economic reality: MEV is a permanent feature of blockchains, and the real solution lies in application-layer design, not just infrastructure shuffling.
introduction
THE TEMPORARY FIX
The MEV Shell Game
MEV-Boost outsources block building to a competitive market but entrenches a new, extractive layer of centralized searcher-builders.
The fix centralizes power downstream. Validators now rely on a handful of trusted relay operators for censorship resistance and block validity. This recreates the very centralization Ethereum's consensus moved to eliminate, making builders the new de facto chain operators.
The economic model is extractive by design. Builders win by maximizing extractable value (MEV) for validators, not user welfare. This aligns incentives for sandwich attacks and DEX arbitrage that directly harm end-users, a dynamic seen in protocols like Uniswap and Curve.
Evidence: Post-Merge, over 90% of Ethereum blocks are built via MEV-Boost. The top three builders consistently control >60% of the market, demonstrating the rapid re-centralization this 'solution' enables.
thesis-statement
THE TEMPORARY FIX
Thesis: Infrastructure Can't Solve an Economic Problem
MEV-Boost is a market design patch that centralizes block production while failing to address the root economic incentives.
MEV-Boost centralizes block building. It outsources block construction to a competitive market of builders, but the auction for the right to build is won by the entity with the best information and capital. This creates a natural monopoly for sophisticated players like Flashbots, bloXroute, and Eden.
The economic problem is permanent. Validators are rational profit-maximizers. The proposer-builder separation (PBS) model in MEV-Boost does not eliminate the incentive to extract value; it merely formalizes and outsources the extraction process to specialized entities.
Infrastructure optimizes, economics dictates. Tools like Flashbots Protect or CoW Swap's solver network can shield users, but they are client-side band-aids. The core protocol's fee market and block space allocation remain a first-price, winner-take-all auction.
Evidence: Post-Merge, over 90% of Ethereum blocks are built via MEV-Boost. The top three builders consistently control >60% of the market, demonstrating the rapid re-centralization of a critical function.
key-trends
BEYOND THE OUTSOURCED BLOCK
The New MEV Supply Chain (Post-Boost)
MEV-Boost outsourced block production but created a fragmented, opaque market. The next wave rebuilds the supply chain from first principles.
01
The Problem: Builder Centralization
MEV-Boost's PBS model created a new monopoly: a handful of builders (e.g., Flashbots, Titan, beaverbuild) now produce >90% of Ethereum blocks. This recreates the exact censorship and centralization risks it aimed to solve, just one layer up.
>90%
Builder Dominance
~1s
Auction Latency
02
The Solution: Enshrined Proposer-Builder Separation (ePBS)
The Ethereum protocol itself must formalize the builder-proposer relationship. ePBS bakes PBS into the consensus layer, eliminating trusted relays and creating a credibly neutral, permissionless marketplace. This is the endgame for Vitalik's roadmap and protocols like EigenLayer.
0
Trusted Relays
100%
Protocol Native
03
The Problem: Intents as the New MEV Frontier
Users don't want to sign complex transactions; they sign intents (e.g., "swap X for Y at best price"). This shifts MEV extraction upstream to solvers and fillers (see UniswapX, CowSwap), creating a new, unregulated supply chain for value leakage.
$10B+
Annual Intent Volume
~500ms
Solver Competition
04
The Solution: SUAVE - A Universal MEV Marketplace
Flashbots' SUAVE is a specialized chain to decentralize every layer: memory pool, block building, and cross-domain MEV. It aims to be the preferred mempool and block builder for all chains, creating a single competitive market and mitigating fragmentation.
All Chains
Target Scope
Encrypted
Mempool
05
The Problem: Cross-Chain MEV Fragmentation
Arbitrage between Ethereum L2s, Solana, and Avalanche is a multi-billion dollar opportunity, but infrastructure is siloed. Bridges like LayerZero and Axelar create new MEV vectors, while no single searcher can efficiently compete across all domains.
Multi-Billion $
Opportunity
10+
Siloed Networks
06
The Solution: Shared Sequencing & Atomic Cross-Chain Rolls
L2 shared sequencers (e.g., Espresso, Astria) and protocols like Across enable atomic execution across chains. This allows searchers to bundle actions on Ethereum, Arbitrum, and Optimism in one atomic transaction, capturing value that currently leaks to fragmented infra.
Atomic
Execution
>50%
Efficiency Gain
MEV-BOOST AS A TEMPORARY FIX
Builder Market Concentration: The Numbers Don't Lie
A quantitative breakdown of MEV-Boost's centralization vectors and the inherent limitations of its PBS model.
| Centralization Metric | MEV-Boost (Current State) | Idealized PBS | Endgame (e.g., SUAVE) |
|---|---|---|---|
Top 3 Builders' Relay Market Share |
| ~33% | 0% (Permissionless) |
Block Proposal Censorship Rate |
| < 1% | 0% (Cryptoeconomic) |
Relay Trust Assumption | Semi-Trusted (KYC/Reputation) | Minimal (ZK Proofs) | None (Smart Contract) |
Builder Extractable Value (BEV) Leakage | High (via Private Orderflow) | Medium (via Commit-Reveal) | Low (via Encrypted Mempool) |
Validator Revenue Capture by Builders |
| ~50% of MEV | < 10% of MEV |
Time to Finality Impact from PBS |
|
| 0 Slots (Native) |
Relay Infrastructure Cost (Annual) | $2-5M (Opex Heavy) | $500k-1M (Lean) | $0 (Protocol-Subsidized) |
Resistance to OFAC Compliance Pressure | ❌ | ✅ | ✅ |
deep-dive
THE TEMPORARY FIX
Why PBS Fails the Economic Test
Proposer-Builder Separation (PBS) in MEV-Boost creates a cartel of builders that centralizes block production and fails to solve the core economic misalignment.
MEV-Boost centralizes block production by outsourcing it to a cartel of specialized builders. This creates a two-tiered validator system where the economic power of block building is concentrated in a few entities like Flashbots and bloXroute.
The builder market is an oligopoly. The high capital and data requirements for competitive building create insurmountable barriers to entry. This results in redundant computation as multiple builders compete to solve the same problem, wasting energy and resources.
PBS misaligns validator incentives. Validators are reduced to passive block proposers who simply select the highest bid, abdicating their core responsibility for network security and censorship resistance. This is the fundamental economic flaw MEV-Boost does not address.
Evidence: Over 90% of Ethereum blocks are built by just three entities via MEV-Boost. This centralization metric proves PBS, as currently implemented, fails its primary decentralization objective.
counter-argument
THE NECESSARY EVIL
Steelman: "But MEV-Boost Was Necessary!"
MEV-Boost was a pragmatic, temporary fix to centralization pressures, not a final solution.
MEV-Boost prevented validator centralization by outsourcing block building. Without it, sophisticated validators running Flashbots MEV-Geth would have captured all MEV, creating an insurmountable economic advantage.
The fix created a new oligopoly. It outsourced power to a handful of professional builders like bloXroute and Beaver Build, who now dominate block production and extract value.
It is a market-based patch, not a protocol fix. MEV-Boost relies on PBS (Proposer-Builder Separation), a market structure that is vulnerable to vertical integration and censorship.
Evidence: Over 90% of Ethereum blocks are built via MEV-Boost, with the top three builders consistently controlling >60% of the market, per ultrasound.money data.
protocol-spotlight
BEYOND THE BLOCK BUILDER
The Real Solutions: Application-Layer MEV Mitigation
MEV-Boost outsources block production but doesn't solve the root cause: applications exposing predictable value on-chain. The real fix is at the protocol-application interface.
01
The Problem: Predictable Execution Paths
DEX AMMs and lending liquidations create atomic, profitable sandwiches and arbitrage. The predictable on-chain state change is the exploit surface.
- Every Uniswap V2 swap is a free option for searchers.
- Liquidation bots compete on gas, extracting value from distressed positions.
- The protocol layer cannot distinguish good from bad reordering.
$1B+
Annual Extractable
~100ms
Arb Window
02
The Solution: Encrypted Mempools & Commit-Reveal
Hide transaction content until inclusion. This breaks frontrunning by making intent opaque. Used by Flashbots SUAVE and Shutter Network.
- Searchers bid on encrypted bundles, not specific trades.
- Fair ordering is enforced by the decryption key release.
- Shifts power from generalized builders back to validators.
>99%
Frontrun Prevention
T+1 Block
Reveal Delay
03
The Solution: Intent-Based Architectures
Users submit desired outcomes, not transactions. Solvers compete off-chain to fulfill them optimally. This abstracts away execution details.
- UniswapX and CowSwap are canonical examples.
- Across Protocol uses intents for cross-chain bridging.
- MEV becomes a solver's cost of business, not user loss.
10-50%
Better Prices
0 Gas
Failed Execution
04
The Solution: Threshold Encryption (e.g., Ferveo)
A cryptographic primitive for distributed key generation and decryption. Enables encrypted mempools without a single trusted party.
- Decentralizes the trust of the commit-reveal scheme.
- Integrates at the consensus layer (e.g., for EigenLayer AVSs).
- Critical for preventing censorship in encrypted flow.
n-of-m
Trust Model
L1 Native
Integration
05
The Problem: Proposer-Builder Collusion
MEV-Boost created a market, but builders and proposers can form exclusive relationships, re-centralizing block production. This is a regulatory and systemic risk.
- Top 3 builders often control >80% of blocks.
- Vertical integration (e.g., Coinbase Base) creates inherent advantage.
- Application-layer solutions reduce the value of this collusion.
>80%
Builder Concentration
Opaque
Payment Flows
06
The Future: MEV-Aware Application Design
Next-gen protocols bake resistance in. Dynamic fees, time-locked orders, and batch auctions internalize MEV as a design parameter.
- Chainlink Fair Sequencing Services provide a middleware option.
- DEXs like Ambient use concentrated liquidity to shrink arb spreads.
- The endgame is MEV as a manageable operational cost, not an extractive tax.
Protocol-Owned
MEV Capture
Design-First
Paradigm
risk-analysis
WHY MEV-BOOST IS A TEMPORARY FIX
Systemic Risks of the Builder-Centric Model
MEV-Boost outsourced block production to a competitive market, but it created a new, more centralized layer of systemic risk.
01
The Centralization Trilemma
MEV-Boost trades validator decentralization for builder centralization. The top 3 builders control ~80% of blocks. This creates a single point of failure for censorship and chain liveness, as seen with OFAC compliance pressures.
- Relay Dependence: Validators rely on a handful of trusted relays for block integrity.
- Builder Cartels: Economic incentives naturally consolidate power in a few dominant entities like Flashbots and bloXroute.
- Liveness Risk: A coordinated attack on major builders could halt the chain.
~80%
Top 3 Builders
12
Active Relays
02
The Inevitable MEV Cartel
Builders with exclusive order flow (e.g., from Coinbase, Binance) have an insurmountable data advantage. This creates a feedback loop where the rich get richer, stifling competition and extracting maximal value from users.
- Order Flow Auctions (OFAs): Attempts to democratize access, but are gated by the same builder oligopoly.
- Vertical Integration: Searchers, builders, and relays merge, reducing market efficiency.
- PBS In-Protocol: The only long-term fix is enshrined Proposer-Builder Separation, moving the auction into the core protocol.
$500M+
Annual MEV Extracted
>50%
CEX Order Flow
03
Relays as Trusted Third Parties
MEV-Boost's architecture reintroduces a critical trust assumption: relays must faithfully deliver the full block and payment. This creates attack vectors for withholding attacks and undermines Ethereum's trust-minimized design.
- Censorship Vectors: Relays can filter transactions, acting as de-facto gatekeepers.
- No Cryptographic Guarantees: Validators cannot verify block contents until after commitment.
- Protocol-Level Solution: Only in-protocol PBS with crLists can cryptographically enforce inclusion.
0
Cryptographic Proofs
100%
Blind Trust Required
04
The Latency Arms Race
The MEV-Boost auction happens in ~500ms, favoring builders with hyper-optimized infrastructure and geographic proximity to relays. This pushes the ecosystem towards centralized, data-center-based validation, reversing years of decentralization efforts.
- Geographic Centralization: Builders cluster near relays in Virginia and Frankfurt.
- Hardware Barriers: Competitive building requires FPGAs and custom hardware, raising entry costs.
- Network Fragmentation: The fast lane marginalizes home validators and smaller players.
~500ms
Auction Window
FPGAs
Required Hardware
future-outlook
THE REALITY
The Inevitable Endgame: MEV is Permanent
MEV-Boost is a temporary market structure fix that centralizes block production, while the fundamental economic force of MEV is a permanent feature of any blockchain with a public mempool.
MEV-Boost centralizes block building. The protocol outsources block construction to a competitive market of specialized builders like Flashbots and BloXroute. This creates a new layer of professional searchers and builders who capture value, but the proposer-builder separation model consolidates power in a few relay operators.
The fundamental MEV problem persists. MEV originates from transaction ordering and state differentials that exist in any transparent system. Solutions like private mempools (e.g., Flashbots Protect) or encrypted mempools (e.g., Shutter Network) only relocate, not eliminate, the economic extraction.
Endgame protocols internalize MEV. Long-term, the only sustainable architecture is to bake MEV management into the protocol layer. Designs like Ethereum's proposer-builder separation (PBS) and Cosmos' Skip Protocol move the auction on-chain, transforming MEV from a parasitic leak into a verifiable, redistributable protocol resource.
Evidence: Over 90% of Ethereum blocks post-Merge are built via MEV-Boost, proving the economic dominance of specialized extraction. However, the top three relay operators consistently control >66% of the market, demonstrating the centralization risk of the current model.
takeaways
THE CENTRALIZATION TRAP
TL;DR for Protocol Architects
MEV-Boost solved a political crisis but cemented a structural flaw, outsourcing Ethereum's core economic security to a fragile, centralized market.
01
The Problem: Proposer-Builder Separation (PBS) is Incomplete
MEV-Boost is an off-protocol patch for PBS. It outsources block building to a private, permissioned relay network and competitive builder market. This creates systemic risk:
- Relays are trusted for censorship resistance and payment validity.
- Builders require massive capital (~32 ETH + high hardware specs), creating oligopoly.
- The protocol has no sovereignty over its own block space auction.
~90%
Relay Market Share
3-5
Dominant Builders
02
The Solution: Enshrined PBS (ePBS)
The endgame is moving PBS into the protocol itself. This makes block building a permissionless, cryptoeconomic role secured by Ethereum consensus.
- Eliminates trusted relays; censorship lists are enforced on-chain.
- Unbundles staking capital from builder capital, lowering barriers.
- Guarantees protocol capture of MEV auction revenue via fee burn or redistribution.
0
Trusted Parties
Protocol
Revenue Capture
03
The Interim Reality: MEV Supply Chain Fragility
Until ePBS, the MEV-Boost supply chain is a centralized point of failure. A relay outage or builder collusion can halt chain progress or censor transactions.
- Single relay failure can cause >2% of blocks to be missed.
- Builders like Flashbots, bloXroute, beaverbuild dominate via data advantages.
- This creates regulatory attack vectors and violates credible neutrality.
< 1s
Outage Impact
High
Sys. Risk
04
The Architect's Mandate: Design for ePBS Now
Protocols built today must assume the future state of enshrined PBS. This means:
- Avoid hard dependencies on today's builder/relay ecosystem.
- Use SUAVE-like intents for MEV resistance, abstracting execution details.
- Structure incentives for permissionless inclusion, not just top-of-block auctions.
- Prepare for native MEV smoothing and redistribution mechanisms at the protocol layer.
Future-Proof
Design Goal
Intent-Based
Architecture
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