Fairness is a mirage because it's impossible to define objectively in a decentralized system. A miner's 'fair' ordering is a validator's 'manipulation'. The MEV-Boost auction on Ethereum proves that fairness is a market outcome, not a protocol rule.
the-cypherpunk-ethos-in-modern-crypto
Blog
Why 'Fair' is the Wrong Goal for Transaction Ordering
The crypto industry's pursuit of 'fair' transaction ordering is a philosophical and technical dead end. This analysis argues for credible neutrality—objective, predictable rules—as the only viable foundation for decentralized systems, examining MEV, PBS, and the cypherpunk ethos.
introduction
THE WRONG GOAL
Introduction: The Fairness Mirage
Pursuing 'fair' transaction ordering is a distraction that obscures the real engineering trade-offs.
The correct goal is credible neutrality. Protocols like Flashbots SUAVE and EigenLayer focus on creating verifiable, permissionless markets for ordering, not enforcing subjective fairness. This shifts the burden from impossible consensus to transparent competition.
Fairness debates ignore the latency/security trade-off. A 'fair' mempool for Uniswap traders increases frontrunning risk. Solana prioritizes speed, accepting that ordering favors those with the best infrastructure, which is a predictable, if unequal, outcome.
Evidence: Ethereum's transition to Proposer-Builder Separation (PBS) via MEV-Boost increased validator revenue by over 300,000 ETH, demonstrating that the market efficiently values ordering rights more than any 'fair' algorithm ever could.
key-insights
THE REALIST'S GUIDE TO MEV
Executive Summary
Pursuing 'fair' ordering is a naive and economically impossible goal; the real objective is credible neutrality and efficient rent extraction.
01
The Problem: 'Fairness' is a Vacuous Concept
Defining a 'fair' transaction order is impossible without a central arbiter, which defeats decentralization. Every proposed 'Fair Sequencing Service' (FSS) simply shifts the MEV extraction point and creates new trusted entities.
- No Objective Metric: Is it first-come-first-serve? By network latency? By gas price? All are gameable.
- Creates New Trust Assumptions: See Axiom, Astria—they become the centralized sequencers they sought to replace.
- Inefficient Markets: Artificially suppressing price discovery (e.g., time-boost auctions) just leaks value off-chain.
0
Consensus on 'Fair'
100%
New Trust Assumption
02
The Solution: Credible Neutrality & Efficient PBS
The goal is a credibly neutral base layer that allows value to flow to its most efficient extractors (builders) and distributors (validators/stakers). Proposer-Builder Separation (PBS) is the architectural blueprint.
- Ethereum's PBS: Separates block building from proposing, creating a competitive builder market.
- Maximal Extractable Value (MEV): Is not a bug; it's a measure of latent economic demand. The system should capture it efficiently.
- Real Winners: Flashbots SUAVE, Jito Labs on Solana. They turn MEV into a public good via staker rewards.
>90%
Eth Blocks via PBS
$500M+
MEV-Boost Rewards
03
The New Stack: Intents & Solving, Not Sequencing
The frontier is moving beyond transaction ordering to intent-based architectures. Users express a goal ("swap X for Y at best price"), and a decentralized solver network competes to fulfill it.
- UniswapX: Outsources swap execution to off-chain solvers, abstracting away frontrunning.
- CowSwap & 1inch Fusion: Use batch auctions solved by a competitive network.
- Result: Better prices for users, MEV is internalized as solver competition, and the base layer only needs to be credibly neutral.
~20%
Better Prices
0
Frontrunning
04
The Metric: Liveness, Censorship, Efficiency
Judge systems by measurable properties, not philosophical ideals. These are the trilemma for any ordering mechanism.
- Liveness: Can users always get transactions included? (See Chainlink's FSS delays).
- Censorship Resistance: Can a centralized sequencer (e.g., Coinbase on Base) filter transactions? PBS with inclusion lists mitigates this.
- Economic Efficiency: Does value flow to the right parties? A well-designed PBS auction does.
Forget 'fair'. Optimize for this triangle.
99.9%
Liveness Target
<1%
Censorship Threshold
thesis-statement
THE WRONG GOAL
The Core Thesis: Credible Neutrality Over Subjective Fairness
Pursuing 'fair' transaction ordering creates more problems than it solves, making credible neutrality the superior architectural principle.
Fairness is subjective. Every user defines fairness differently: first-come-first-served, highest fee, or based on application logic. A protocol cannot satisfy all definitions simultaneously without introducing its own bias, creating a new central point of failure.
Credible neutrality is objective. A system is credibly neutral when its rules are transparent, permissionless, and cannot be manipulated for specific outcomes. This is the foundation of Ethereum's base layer and protocols like Uniswap and Arbitrum.
Subjective fairness invites governance capture. Attempts to enforce fairness, like MEV auctions or complex ordering rules, create governance surfaces. These are exploited by sophisticated actors, as seen in early Flashbots research, harming the users they aim to protect.
Evidence: The failure of 'fair ordering' research. Proposals like Aequitas and Themis proved impractical, adding latency and complexity for marginal, unverifiable benefit. The market chose PBS (Proposer-Builder Separation) for its credible neutrality.
historical-context
THE EVOLUTION
How We Got Here: From Dark Forests to PBS
The pursuit of 'fair' transaction ordering is a flawed objective that misunderstands the economic and technical realities of block production.
Fairness is a mirage. In a decentralized network, objective fairness is computationally impossible to define or enforce. The mempool is a dark forest where searchers use MEV bots to front-run and sandwich trades, a reality protocols like Flashbots and EigenLayer were built to manage, not eliminate.
Proposer-Builder Separation (PBS) accepts reality. PBS, pioneered by Flashbots' MEV-Boost and now native to Ethereum's roadmap, formalizes the specialization of labor. Builders compete on block quality, not fairness, creating a liquid market for block space that increases validator revenue and chain security.
The correct goal is credible neutrality. A system must be resistant to censorship and transparent in its rules. PBS with crLists achieves this by separating profit motive from inclusion decisions. This is why UniswapX and CowSwap route intents through solvers—they optimize for outcome, not naive FIFO ordering.
Evidence: Builder dominance proves the point. Post-Merge, over 90% of Ethereum blocks are built by a handful of specialized builders. This centralization of building is the cost of efficient, high-value block production, a trade-off the network explicitly chose over the unattainable ideal of fair ordering.
TRANSACTION ORDERING PHILOSOPHIES
Fairness vs. Credible Neutrality: A Protocol Design Matrix
Comparing design trade-offs between 'fair' ordering goals and credibly neutral infrastructure. 'Fairness' is subjective and gameable, while credible neutrality focuses on predictable, permissionless rules.
| Core Design Metric | Subjective Fair Ordering (e.g., MEV-Boost) | Credibly Neutral Sequencing (e.g., Espresso, Radius) | Centralized Sequencer (Status Quo) |
|---|---|---|---|
Primary Objective | Minimize extractable value for users | Provide verifiable, permissionless access to ordering | Maximize profit and uptime for operator |
Time-to-Dominance Attack Cost | ~$20M (cost to corrupt relay/validator set) |
| $0 (operator discretion) |
Censorship Resistance | Weak (relays can filter transactions) | Strong (commit-reveal schemes, forced inclusion) | None (operator controls all inclusion) |
MEV Redistribution | Yes (via MEV-Boost auctions & PBS) | Protocol-defined (e.g., burn, redistribute) | Captured 100% by operator |
Builder/Proposer Separation | Enforced (PBS) | Optional (can be integrated) | None (monolithic operator) |
Latency Added for 'Fairness' | ~100-500ms (for auction rounds) | < 12 seconds (for commit-reveal schemes) | 0ms (deterministic ordering) |
Key Vulnerability | Collusion among a few large entities | Cryptographic break or TEE compromise | Single point of failure |
deep-dive
THE INCENTIVE MISMATCH
The Slippery Slope of Subjective Fairness
Pursuing subjective fairness in transaction ordering creates perverse incentives and centralization vectors that degrade network security.
Fairness is a subjective trap. Defining 'fair' ordering requires a centralized arbiter, which contradicts the decentralized trust model of blockchains. The Ethereum Foundation's research on MEV-Boost illustrates how even well-intentioned fairness rules become attack surfaces for sophisticated actors.
Fair ordering centralizes power. Protocols like Flashbots' SUAVE aim to create fairer markets, but their logic must execute somewhere. This creates a new centralized sequencing layer, shifting power from validators to the entity defining the fairness algorithm.
Incentives trump ideology. Miners and validators optimize for profit, not philosophy. A 'fair' system that reduces their extractable value will be forked or ignored, as seen in the initial resistance to EIP-1559 before its fee-burn mechanism aligned incentives.
Evidence: The Proposer-Builder Separation (PBS) model in Ethereum's roadmap accepts that ordering is a competitive market. It enforces credibly neutral rules at the protocol level (e.g., block validity) and outsources 'fairness' to a competitive builder market, avoiding subjective judgments.
case-study
WHY 'FAIR' IS THE WRONG GOAL
Case Studies in Neutral Design
Neutrality in transaction ordering isn't about fairness; it's about creating a predictable, credibly neutral substrate that enables new applications.
01
The Problem: The MEV Auction
First-come-first-served ordering is a naive 'fairness' that creates a wasteful, opaque speed race. The result is a ~$1B+ annual private market where value is extracted from users and returned to validators via priority gas auctions.
- Creates latency arms races and network spam.
- Obfuscates the true cost of execution for end-users.
- Centralizes block production around speed, not capital efficiency.
$1B+
Annual Extract
~500ms
Arms Race
02
The Solution: Proposer-Builder Separation (PBS)
PBS, pioneered by Ethereum, explicitly separates block building from block proposal. It formalizes the MEV market, making it transparent and contestable.
- Builders compete on execution quality in an open auction.
- Proposers (validators) simply select the highest-paying, valid header.
- Enables credible neutrality; the protocol doesn't pick winners, the market does.
>90%
Ethereum Blocks
Open
Auction
03
The Application: Intents & SUAVE
A neutral ordering layer unlocks new primitives. Intents (as seen in UniswapX, CowSwap) let users express desired outcomes, not transactions. SUAVE is a dedicated chain to become the neutral mempool and decentralized block builder for all chains.
- Users get better prices via order flow auction.
- DApps access cross-domain liquidity without trusted relays.
- Turns MEV from a bug into a feature for optimization.
UniswapX
Case Study
Cross-Chain
Scope
04
The Alternative: Centralized Sequencers
Most rollups today use a single, trusted sequencer for ordering—a temporary fix that becomes a systemic risk. This is the antithesis of neutral design, creating a single point of failure and censorship.
- Introduces liveness risk (e.g., ~$130M stuck in Arbitrum bridges during outage).
- Captures all MEV/order flow value for the sequencer operator.
- Forces a future, complex migration to decentralized sequencing.
1
Of N Failure
100%
MEV Capture
05
The Metric: Time-To-Inclusion Guarantees
True neutrality is measured by predictability, not fairness. A system should provide cryptoeconomic guarantees on maximum inclusion time, rendering frontrunning unprofitable.
- Enables hard SLAs for high-frequency DeFi and gaming.
- Renders latency advantages economically irrelevant.
- Shifts competition from hardware to algorithm and capital efficiency.
SLA
Guarantee
0
Speed Tax
06
The Reality: Order Flow is the New Oil
The fight isn't over fairness; it's over who owns and monetizes the right to order. Wallet providers, applications, and block builders are all vying to become the order flow aggregator.
- Neutral protocols must prevent vertical integration that re-centralizes the stack.
- Solutions like MEV-Share attempt to redistribute captured value back to users.
- The endgame is a liquid market for block space futures based on order flow.
New
Commodity
MEV-Share
Redistribution
counter-argument
THE REALITY OF FAIRNESS
Counter-Argument: But What About the Little Guy?
Pursuing 'fair' ordering is a misallocation of engineering resources that fails to solve the core problem for retail users.
Fairness is a red herring. The primary pain point for a retail user is not losing a trade to a bot, but losing the trade due to high fees or network congestion. Solving for 'fairness' does not solve for cost or speed.
The real goal is accessibility. A user's priority is successful, affordable execution, not winning a zero-sum queue. Systems like UniswapX and CowSwap demonstrate this by abstracting execution complexity into intents, not by policing the mempool.
Fair ordering creates systemic fragility. Enforcing a global first-come-first-served queue requires consensus-level coordination, which inherently reduces throughput and increases latency for everyone. This is a poor trade-off for the marginal benefit.
Evidence: The success of Flashbots' SUAVE and private RPCs like Alchemy's shows the market values efficient execution over procedural fairness. Users opt into these 'unfair' systems because they deliver better results.
future-outlook
THE GOAL IS ROBUSTNESS
Future Outlook: The Neutrality Stack
Transaction ordering must prioritize system resilience over abstract fairness, creating a neutral foundation for diverse applications.
Fairness is a subjective trap. The goal for transaction ordering is verifiable neutrality, not fairness. Fairness implies a moral judgment that varies per application, while neutrality provides a predictable, auditable base layer for all.
The neutrality stack separates concerns. A neutral ordering layer (e.g., Espresso Systems, Astria) provides censorship resistance and liveness. Application-specific ordering rules (like MEV auctions or FCFS) are built on top, not baked into the base.
This mirrors internet protocol design. TCP/IP is neutral; applications like HTTP or BitTorrent define their own fairness. The base chain's job is secure, timely inclusion, not optimizing for Uniswap or friend.tech.
Evidence: The proliferation of intent-based architectures (UniswapX, Anoma) proves the demand. They abstract ordering complexity away from users, requiring a robust, neutral settlement layer to execute against.
takeaways
WHY 'FAIR' IS THE WRONG GOAL
Key Takeaways
Pursuing 'fair' ordering is a naive trap; the real goal is credible neutrality and predictable, efficient market outcomes.
01
The Problem: 'Fairness' is a Vague, Unenforceable Ideal
Defining 'fair' is subjective and opens the door to regulatory overreach and endless debate. The market needs predictable rules, not moral judgments.
- Subjective Standard: What's fair for a DEX trader is unfair for an NFT flipper.
- Regulatory Risk: Ambiguous fairness invites the SEC to become the final sequencer.
- Performance Tax: Enforcing complex fairness heuristics adds latency and cost for all users.
0
Clear Definitions
~100-300ms
Added Latency
02
The Solution: Credible Neutrality & Priority Gas Auctions
Embrace transparent, rule-based markets for ordering rights. PGAs on chains like Ethereum are a feature, not a bug, allowing value to be efficiently captured and redistributed.
- Predictable Rules: First-price auctions are a clear, game-theoretically sound mechanism.
- Value Capture: MEV is extracted and can be democratized via PBS (Proposer-Builder Separation) or burned.
- Efficiency: High-value transactions naturally get priority, optimizing network utility.
$1B+
Annual MEV
>90%
PBS Adoption
03
The Architect's Goal: Minimize Trust, Maximize Liveness
The core failure mode isn't unfairness, but censorship or downtime. Protocols like Chainlink FSS and Espresso Systems focus on verifiable, decentralized sequencing to prevent these attacks.
- Censorship Resistance: The sequencer must be unable to indefinitely block your transaction.
- Liveness Guarantees: The system must finalize blocks even if the primary sequencer fails.
- Verifiability: Anyone must be able to prove the sequencer cheated, enabling slashing.
<2s
Time to Prove Fraud
99.9%
Uptime SLA
04
The User's Reality: Intents & Solvers Win
End-users don't care about block position. Projects like UniswapX, CowSwap, and Across abstract ordering away via intents, letting a competitive solver network compete on execution quality.
- Better Prices: Solvers internalize MEV for improved user outcomes (e.g., JIT Liquidity).
- No Failed TXs: Users submit preferences, not rigid transactions.
- Cross-Domain Efficiency: Solvers naturally bridge liquidity across Ethereum, Arbitrum, Optimism.
$10B+
Volume Processed
~5-20%
Better Execution
05
The Fallacy: 'Fair' Ordering Kills Network Effects
Forcing naive FIFO or random ordering destroys the economic incentives for sophisticated players (searchers, builders) who provide liquidity and efficiency. This leads to a less useful, slower chain.
- Liquidity Evaporation: HFT market makers exit, widening spreads for everyone.
- Innovation Stifled: No incentive to build advanced execution logic like DEX Arbitrage or Liquidations.
- Subsidy Removal: The $500M+ in MEV that currently subsidizes validator security vanishes.
30-50%
Spread Increase
$0
Security Subsidy
06
The Benchmark: Sui & Aptos Use FIFO. It's a Trade-Off.
These newer L1s implement simple FIFO ordering in their mempool for deterministic performance. This is a conscious architectural choice that sacrifices some market efficiency for developer simplicity and lower latency.
- Pro: Predictable Latency: Sub-300ms finality is easier to guarantee.
- Con: Inefficient Markets: No PGA means latent arbitrage opportunities persist longer.
- Reality: It's a design constraint, not a moral victory. The MEV just manifests differently.
<300ms
Finality
~0
PGA Efficiency
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