Private mempools like Flashbots SUAVE are the dominant response to public MEV extraction, but they replace transparent competition with opaque, permissioned order flow aggregation. This creates a new centralization vector where block builders become the ultimate arbiters of transaction inclusion and ordering, consolidating power away from validators.
smart-contract-auditing-and-best-practices
Blog
The Future of MEV: Will Private Mempools Centralize or Democratize?
Flashbots SUAVE and private order flow shift MEV power from searchers to builders and validators. This creates new centralization vectors that smart contract audits must now evaluate. We analyze the risks and the path forward.
introduction
THE CORE TENSION
Introduction: The Centralization Paradox
The push to mitigate MEV is creating a new, more opaque layer of centralization that could undermine the very networks it aims to protect.
The democratization promise of MEV-Boost is being inverted. Instead of distributing block-building rights, private order flow auctions concentrate them. Protocols like CoW Swap and UniswapX route intents through these systems, making their solvers the new, centralized intermediaries for user transactions.
The evidence is in adoption metrics. Over 90% of Ethereum blocks are built via MEV-Boost relays, with a handful of builders like Titan Builder and beaverbuild controlling the majority of the market. This is a more insidious centralization than mining pools because the logic is proprietary.
key-trends
THE FUTURE OF MEV
Three Trends Defining the New MEV Landscape
The arms race for extractable value is shifting from public block space to private channels, forcing a fundamental redesign of transaction flow.
01
The Problem: Public Mempools Are Toxic
Broadcasting transactions publicly is an invitation for frontrunning and sandwich attacks. This creates a negative-sum game for users and forces builders into wasteful gas auctions.\n- ~$1.2B extracted from users in 2023\n- Forces gas price inflation for all network participants\n- Creates systemic risk via time-bandit attacks
$1.2B+
Extracted (2023)
>90%
Sandwichable Txs
02
The Solution: Intent-Based Architectures (UniswapX, CowSwap)
Users submit desired outcomes, not specific transactions. Solvers compete off-chain to fulfill intents optimally, moving competition from gas wars to execution quality.\n- Removes frontrunning surface by design\n- Enables cross-domain liquidity (e.g., via Across, layerzero)\n- ~20-30% better prices for users via solver competition
20-30%
Price Improvement
0 Gas
For Failed Txs
03
The Centralization Risk: Exclusive Order Flow (Flashbots SUAVE)
Private mempools controlled by dominant builders/validators can become centralized choke points. This risks recreating the traditional finance rent-extraction model inside crypto.\n- Top 3 builders control ~80% of Ethereum blocks\n- Creates information asymmetry and potential censorship\n- SUAVE aims to decentralize but faces adoption chicken-and-egg
~80%
Builder Concentration
SUAVE
Counter-Protocol
deep-dive
THE CENTRALIZATION TRAP
The Slippery Slope: How Good Intentions Lead to Centralized Control
Private mempools, designed to protect users, create a new vector for systemic centralization by consolidating order flow and information.
Private order flow centralizes power. Protocols like Flashbots Protect and bloXroute's BackRunMe route transactions to exclusive builders, creating a privileged information layer. This segregates the mempool, granting a structural advantage to entities with access.
The builder market consolidates. The efficiency of private order flow favors large, capital-rich builders like Titan Builder and beaverbuild. Smaller validators and builders are excluded from this high-value flow, creating a two-tiered system.
Information asymmetry becomes structural. In a public mempool, MEV is a competitive, permissionless race. Private channels like SUAVE aim to democratize but currently centralize the most valuable transaction data among a few players.
Evidence: Builder dominance metrics. Post-merge, a single builder frequently secures over 40% of Ethereum blocks, a concentration directly enabled by exclusive order flow agreements and private transaction channels.
INFRASTRUCTURE ARCHETYPES
MEV Power Concentration: A Comparative Snapshot
A comparison of MEV infrastructure models based on their impact on power concentration, censorship resistance, and user outcomes.
| Metric / Feature | Public Mempools (Status Quo) | Private Orderflow Auctions (e.g., Flashbots SUAVE) | Permissionless Builders (e.g., mev-boost, EigenLayer) |
|---|---|---|---|
Primary Control Point | Validators & Proposers | Searchers & Builders | Decentralized Builder Network |
User Transaction Privacy | |||
Censorship Resistance Score (1-10) | 3 | 5 | 8 |
Estimated Builder Profit Share |
| ~30% to searchers, ~70% to builders/validators | <20% to any single entity |
Requires Native Token Staking | |||
Integration Complexity for Apps | Low | High (requires SDK/relay integration) | Medium (standard mev-boost API) |
Time-to-Finality Impact | Adds 1-12 sec block latency | Adds 2-5 sec block latency | Adds <1 sec block latency |
Cross-Domain MEV Support |
risk-analysis
THE FUTURE OF MEV
The New Audit Checklist: Centralization Vectors to Scrutinize
Private mempools and new auction mechanisms are reshaping MEV extraction, creating novel centralization risks that demand technical scrutiny.
01
The Problem: Builder Centralization via Private Orderflow
The rise of Flashbots Protect and bloXroute's BackRunMe incentivizes users to route transactions to a handful of dominant builders, creating a single point of failure. This centralizes block production power and censorship capabilities.
- Risk: Top 3 builders control >80% of MEV-Boost blocks.
- Vector: Exclusive orderflow deals create an unassailable moat for incumbents.
>80%
Builder Share
1
Point of Failure
02
The Solution: Permissionless PBS & SUAVE
Decentralizing the builder role through proposer-builder separation (PBS) on-chain and shared auction infrastructure like Flashbots' SUAVE aims to commoditize block building.
- Mechanism: Open, competitive bidding for block space in every slot.
- Goal: Break the link between exclusive orderflow and builder dominance.
0
Exclusive Deals
100%
Slot Auction
03
The Problem: Intents Centralize Routing Logic
Intent-based architectures (e.g., UniswapX, CowSwap) abstract transaction construction to specialized "solvers." This risks centralizing sophisticated routing logic and cross-chain liquidity access into a few black-box entities.
- Risk: Solver cartels with >60% market share can extract rent and manipulate prices.
- Vector: Complexity barrier to entry for new solvers.
>60%
Solver Share
Black-Box
Routing Logic
04
The Solution: Open Solver Networks & MEV-Share
Democratizing intent execution via open solver networks with verifiable rules and shared revenue models like MEV-Share realigns incentives.
- Mechanism: Public auction for intent fulfillment with credible neutrality.
- Goal: Distribute value back to users and app developers, not just intermediaries.
User
Value Return
Open
Solver Set
05
The Problem: Cross-Chain MEV Creates New Cartels
Arbitrage and settlement across chains (via LayerZero, Axelar, Wormhole) requires capital, data, and speed concentrated in specialized searcher-builder-validator cartels.
- Risk: Cross-domain atomicity is a moat; cartels with $100M+ in capital dominate.
- Vector: Vertical integration of oracles, relays, and execution.
$100M+
Capital MoAT
Vertical
Integration
06
The Solution: Shared Sequencing & Force Inclusion
Shared sequencers (like those proposed for rollups) and force inclusion lists can guarantee fair, cross-rollup transaction ordering and access, preventing cartelization.
- Mechanism: Decentralized sequencer set with enforceable commit-reveal schemes.
- Goal: Neutral sequencing as a public good, not a private profit center.
Public Good
Sequencing
Guaranteed
Access
future-outlook
THE VERIFIABLE STANDARD
The Path to Democratization: Auditing for Credible Neutrality
Credible neutrality in MEV requires enforceable, auditable standards, not just promises.
Credible neutrality is verifiable or non-existent. Protocols like Flashbots' SUAVE or bloXroute's encrypted mempools must publish cryptographic proofs of fair ordering for public audit. Without this, private order flow is just a black box with better marketing.
Auditing shifts power to users. Tools like EigenLayer's EigenDA for data availability or TEE-based attestations from Obol/Somnia create objective, on-chain verification of sequencer behavior. This allows users and builders to punish deviations from neutrality.
The standard is economic finality. The benchmark for a democratized system is cost-of-corruption exceeding profit-from-corruption. Auditable proofs make this calculation public, forcing protocols like Espresso or Astria to compete on provable security, not just speed.
Evidence: Flashbots' research on PBS (Proposer-Builder Separation) established the foundational audit trail. Its adoption shows the market demands verifiable separation of powers, a prerequisite for any credible neutrality claim in private mempools.
takeaways
THE MEV POWER SHIFT
TL;DR for Protocol Architects
Private mempools are not just about privacy; they are a fundamental re-architecting of block space allocation that will determine the next decade's winners.
01
The Problem: The Dark Forest is a Centralizing Force
Public mempools are a free-for-all where generalized frontrunners (e.g., Flashbots, bloXroute) with the fastest infrastructure and most capital win. This creates vertical integration where the same entities that build blocks also extract the most value, leading to proposer centralization. The result is a ~$1B+ annual MEV tax on users that funds this centralization.
~$1B+
Annual MEV
>80%
Flashbots Share
02
The Solution: Intents & SUAVE
Shift from transaction-based to intent-based architectures. Users express desired outcomes (e.g., "swap X for Y at best price"), and a decentralized network of solvers competes to fulfill them. SUAVE aims to be a decentralized mempool and block builder, separating execution from consensus. This democratizes access to MEV by creating a competitive solver market and preventing exclusive order flow deals.
UniswapX
Key Entity
CowSwap
Key Entity
03
The Risk: Private RPCs Become the New Cartel
If private RPC endpoints (e.g., Flashbots Protect, bloXroute BackRunMe) become the dominant path for user transactions, they simply replace the public mempool cartel with a private order flow cartel. Block builders with exclusive deals with these RPCs gain an insurmountable advantage, re-centralizing MEV capture. This is the centralization risk of convenience.
~50%+
OF Share to Win
0 Latency
Advantage
04
The Hedge: Encrypted Mempool Protocols
Protocols like Shutterized rollups and EigenLayer's MEV Blocker use threshold cryptography to encrypt transactions until block inclusion. This neutralizes frontrunning while preserving credible neutrality of the public mempool. It's a defensive hedge against private RPC centralization, ensuring a permissionless base layer for order flow.
Threshold
Cryptography
EigenLayer
Key Entity
05
The Metric: Proposer Payment Variance
The key signal for centralization is proposer payment variance. If block builders using private order flow consistently outbid others by >10%, the network centralizes. Solutions that succeed will reduce this variance by creating a liquid, transparent market for block space rights. Watch mevboost.pics data.
>10%
Critical Variance
mevboost
Key Metric
06
The Architect's Playbook: Own the Settlement
The ultimate control point is settlement. Protocols that build their own app-chain or high-throughput rollup (using Celestia, EigenDA) can enforce their own MEV policy—like a built-in CowSwap solver or encrypted mempool. This bypasses the L1 MEV war entirely. The future is application-specific block space.
App-Chain
Strategy
Celestia
Key Entity
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