The Hidden Cost of Relying on a Single MEV Relay

A single dominant relay can enforce regulatory blacklists, creating a centralized point of failure for network neutrality. This isn't theoretical—it's happening.

• >70% of post-Merge blocks have been built by relays compliant with OFAC sanctions.
• Creates a two-tiered transaction system where sanctioned addresses are excluded.
• Undermines Ethereum's core value proposition as a credibly neutral settlement layer.

When block building is centralized, value flows to a few entities instead of the network. Builders like Jito Labs and bloXroute capture billions in MEV, while validators settle for minimal priority fees.

• $1.2B+ in MEV extracted since the Merge, largely captured by a handful of builders.
• Validators become passive rent-seekers, outsourcing their core duty of block production.
• This economic capture disincentivizes protocol-level innovation in PBS (Proposer-Builder Separation).

A technical fault or malicious act by a dominant relay can halt a significant portion of Ethereum's block production. The network's liveness depends on the health of a few private, opaque services.

• ~90% relay market share for Flashbots creates catastrophic systemic risk.
• Relays are not credibly neutral or Byzantine fault-tolerant like the base layer.
• A relay outage or attack could cause mass reorgs and destabilize DeFi protocols like Aave and Uniswap.

The antidote is enforced competition. This requires both immediate relay diversification and long-term protocol solutions like Flashbots' own SUAVE.

• Aggregators like Relayoor and Eden Network provide alternative, non-censoring relays.
• SUAVE aims to decentralize the entire MEV supply chain into a shared mempool and decentralized block builder.
• Validators must actively rotate relays to punish censorship and distribute power.

Validators face a prisoner's dilemma: maximize short-term MEV rewards by using the dominant relay, or protect the network by using a diverse, potentially less profitable set. The economic incentives are misaligned.

• Relay competition reduces extractable MEV for individual validators in the short term.
• Protocols like EigenLayer could create slashing conditions for censorship, realigning incentives.
• Without staking pool pressure (e.g., from Lido, Rocket Pool), the status quo will persist.

We cannot measure what we cannot see. Relays operate as black boxes, hiding their order flow auctions, builder selection, and internal policies. This lack of transparency is a feature, not a bug.

• Zero visibility into private order flow deals between searchers and exclusive builders.
• Enables off-chain collusion and time-bandit attacks that threaten chain stability.
• Solutions require open-source relay software and standardized metrics for validator dashboards.

A dominant relay can become a political tool. It can censor transactions from OFAC-sanctioned addresses or blacklist protocols, turning a technical layer into a regulatory enforcement arm.

• Real-World Precedent: Flashbots' dominance post-Merge led to ~70%+ of Ethereum blocks being OFAC-compliant.
• Existential Threat: This violates the credibly neutral base layer promise, pushing activity to less-censored chains like Solana or Avalanche.

With no competitive pressure, a single relay can extract maximum value from builders and users, acting as a tax on the entire ecosystem.

• Builder Margins: Relay can take a >90% cut of MEV profits, disincentivizing builder innovation.
• User Cost: This cost is passed down, increasing gas prices and sandwich attack losses for end-users, directly harming DeFi protocols like Uniswap and Aave.

A bug or targeted attack on the sole relay halts block production for the entire validator set relying on it, causing a chain halt.

• Technical Risk: A single software bug (e.g., in MEV-Boost) could cause mass slashing events or downtime.
• Network Effect: Validators seeking reliable revenue flock to the dominant relay, creating a positive feedback loop of centralization that is hard to break.

Enforcing Proposer-Builder Separation (PBS) at the protocol level decentralizes the relay layer by design, making censorship and monopoly pricing non-viable.

• Ethereum's ePBS: Aims to bake PBS into the consensus layer, removing the trusted relay intermediary.
• Builder Competition: Opens the field for specialized builders like BloXroute and Titan, forcing efficiency.

Flashbots' SUAVE creates a neutral, chain-agnostic marketplace for block space and MEV, breaking the relay monopoly by decentralizing the pre-confirmation layer.

• Unified Auction: Separates transaction ordering from execution, preventing a single entity from controlling the flow.
• Cross-Chain: Native support for Ethereum, Arbitrum, Optimism fragments MEV power across ecosystems.

Validators must actively diversify relay usage and monitor for censorship to protect network integrity and their own rewards.

• Technical Mandate: Run multiple MEV-Boost relays (e.g., Flashbots, BloXroute, Agnostic) and implement circuit-breakers for censorship.
• Economic Incentive: Staking pools like Lido and Rocket Pool must enforce relay diversity to maintain the value of their $30B+ staked ETH.

Relying on a dominant relay like Flashbots leaves your protocol vulnerable to OFAC compliance, which can censor transactions. This isn't theoretical—it's a >50% censorship rate on Ethereum post-Merge.\n- Hidden Cost: Degraded UX and compliance risk for DeFi protocols.\n- Solution: Multi-relay architecture using services like BloXroute, Eden, or Titan to guarantee inclusion.

A single relay creates a bottleneck for block builders, reducing competition and increasing latency for transaction finality. This directly translates to worse prices for end-users.\n- Hidden Cost: ~100-200ms+ of extra latency, leading to increased MEV extraction and slippage.\n- Solution: Parallel relay networks and fast lane services like EigenLayer's EigenDA or SUAVE to decentralize speed.

When one relay controls the order flow, it creates a single point of failure and rent extraction. Builders have no leverage, leading to higher fees and less value returned to users/validators.\n- Hidden Cost: Captured value that should go to stakers or be burned is instead taken as profit.\n- Solution: Implement MEV-Boost++ or proposer-builder separation (PBS) designs to enforce competitive, open markets.

Optimistic and ZK rollups that batch transactions through a single relay inherit its risks. A relay outage or attack can halt billions in TVL moving across bridges like Arbitrum, Optimism, or zkSync.\n- Hidden Cost: Systemic risk to cross-chain liquidity and sequencer liveness.\n- Solution: Decentralized sequencer sets or shared sequencing layers like Espresso or Astria that are relay-agnostic.

A centralized relay controls the data pipeline for block builders. This lack of transparency makes it impossible to audit MEV flow or detect collusion, undermining trust in the chain's neutrality.\n- Hidden Cost: Opaque markets where front-running and time-bandit attacks can thrive unseen.\n- Solution: Open-source relay clients and MEV-Share-like frameworks that provide visibility and fair distribution.

Building protocol logic that assumes a specific relay's behavior (e.g., its ordering rules) creates technical debt and vendor lock-in. Migrating away becomes a hard fork-level event.\n- Hidden Cost: Lost agility and innovation, stuck with outdated or expensive relay tech.\n- Solution: Design with relay-agnostic standards from day one, using abstraction layers and modular consensus clients.