The mempool is dead. The public transaction queue is now a secondary market. Flashbots' SUAVE and private RPC endpoints from Alchemy and Infura execute the majority of high-value transactions off-chain, submitting them directly to block builders.
security-post-mortems-hacks-and-exploits
Blog
Why Flashbots and Co. Are Becoming the New Gatekeepers
The MEV supply chain—searchers, builders, and relays—has consolidated into a new layer of infrastructure with unchecked power over transaction inclusion, ordering, and censorship. This is the systemic risk no one is talking about.
introduction
THE NEW POWER DYNAMIC
Introduction: The Invisible Bouncers
Blockchain's promise of permissionless access is being reshaped by specialized infrastructure that controls transaction flow and value capture.
Maximal Extractable Value (MEV) is the economic engine. This arbitrage revenue funds the searcher-builder-proposer pipeline, creating a professionalized layer that ordinary users cannot access. Protocols like Uniswap and Aave are the liquidity pools this system extracts from.
This creates a new gatekeeper class. The entities controlling block construction and order flow—Flashbots, bloXroute, Eden—determine transaction inclusion, finality speed, and cost. Their decisions are the new consensus.
Evidence: Over 90% of Ethereum blocks are now built by MEV-Boost relays, and Flashbots' relay has consistently commanded the largest market share, demonstrating centralized points of failure in a decentralized network.
thesis-statement
THE NEW POWER STRUCTURE
The Core Argument: Proposer-Builder Separation Created a New Oligopoly
Proposer-Builder Separation (PBS) solved MEV centralization by creating a specialized market, but this market is now dominated by a few elite builders.
Flashbots' SUAVE is the blueprint for this new oligopoly. It abstracts block building into a competitive auction, but the capital and data requirements for winning bids create massive entry barriers for new builders.
The builder market is winner-take-most. Top builders like Titan Builder and beaverbuild consistently win over 50% of Ethereum blocks because they integrate with exclusive order flow from major exchanges and MEV searchers.
This is not decentralization; it's vertical integration. The same entities that dominate MEV search (e.g., Jito Labs on Solana) now control the builder role, creating a new point of centralization that PBS was meant to prevent.
Evidence: In Q1 2024, the top three builders produced over 80% of Ethereum blocks. The network's censorship resistance now depends on the compliance policies of these few private companies.
key-trends
THE NEW INFRASTRUCTURE LAYER
The Consolidation of Power: Three Unavoidable Trends
The MEV supply chain is maturing, creating centralized chokepoints that control transaction flow, privacy, and value capture.
01
The Problem: Permissionless Builders Are a Myth
The 'builder' role is now a capital-intensive arms race. The top 5 builders (Flashbots, bloXroute, beaverbuild, Titan, Rsync) control >90% of Ethereum blocks. This centralizes censorship power and creates a single point of failure for OFAC compliance.
- Key Consequence: Network resilience declines as block production consolidates.
- Key Consequence: Relayers like Flashbots Protect become the default, non-custodial RPC for retail.
>90%
Block Share
5
Dominant Builders
02
The Solution: Vertical Integration of the Stack
Entities like Flashbots (SUAVE) and Jito Labs are not just building products; they are building vertically integrated ecosystems. They control the searcher, the builder, the relay, and the user-facing RPC. This captures value across the entire MEV supply chain.
- Key Benefit: Creates seamless, optimized user experiences (e.g., instant transaction bundling).
- Key Benefit: Locks in network effects, making displacement by new entrants nearly impossible.
Full-Stack
Control
SUAVE
Ecosystem Play
03
The Inevitability: Private Orderflow as the Ultimate MoAT
The real battle is for exclusive orderflow. Flashbots Protect, BloXroute's BackRunMe, and CowSwap's solver competition all compete to be the exclusive recipient of user transactions. This privatizes the mempool, killing the foundational 'permissionless' property of public blockchains.
- Key Consequence: Searchers must pay for access, creating a pay-to-play market for MEV.
- Key Consequence: Users trade decentralization for better execution, accelerating the trend.
Exclusive
Orderflow
Pay-to-Play
Searcher Access
MEV SUPPLY CHAIN
The Gatekeeper Dashboard: Who Controls the Blocks?
A comparison of dominant players in the MEV supply chain, quantifying their control over block production, censorship resistance, and user/developer value capture.
| Key Metric / Feature | Flashbots (SUAVE) | bloXroute | Titan Builder | Native Protocol (e.g., Ethereum) |
|---|---|---|---|---|
Avg. MEV-Boost Relay Market Share (30d) |
| ~15% | ~10% | N/A |
Proposer-Builder Separation (PBS) Enforcement | ||||
Censorship Resistance (OFAC Compliance) | ||||
Cross-Chain Intent Routing (e.g., via SUAVE) | ||||
Avg. Builder Payment to Proposer (per block) | ~0.15 ETH | ~0.14 ETH | ~0.145 ETH | ~0.05 ETH |
Time to Finality for User (Guaranteed Inclusion) | < 5 sec | < 12 sec | < 12 sec | ~12 sec |
Open Source Core Infrastructure |
deep-dive
THE NEW POWER STRUCTURE
Anatomy of a Gatekeeper: Relays, Builders, and the Trust Assumption
The MEV supply chain has formalized a new, centralized layer of infrastructure that controls block production.
Flashbots' SUAVE is a misdirection. The narrative of decentralization distracts from the current reality where centralized relays like Flashbots, bloXroute, and Manifold control 90%+ of Ethereum blocks. These entities are the gatekeepers, not the builders.
Builders are execution engines, not decision-makers. A builder like EigenLayer's EigenPhi or jito-solana competes on technical performance, but a relay chooses the winner. This creates a single point of failure and censorship.
The trust assumption is now off-chain. Ethereum's consensus is decentralized, but block construction relies on trusting relay operators. This is the critical vulnerability in PBS that SUAVE has not solved.
Evidence: In Q1 2024, Flashbots Relay facilitated over 80% of Ethereum blocks. A single entity's downtime would cripple chain finality.
counter-argument
THE ECONOMIC REALITY
The Steelman: "This is Just Efficient Market Making"
MEV infrastructure is a natural evolution of market-making, not a corruption of decentralization.
MEV is arbitrage infrastructure. The core function of searchers and builders is price discovery and liquidity provision across fragmented venues like Uniswap and Curve. This activity reduces spreads and improves capital efficiency, which is a net benefit for users.
Centralization is a feature. The builder market consolidates because economies of scale in block construction are immense. Just as high-frequency trading firms dominate traditional markets, entities like Flashbots and bloXroute dominate because they are more efficient.
The gatekeeper critique is naive. The real gatekeepers are validators, who ultimately choose the winning block. Builders are just competitive bidders for validator attention. The protocol (PBS) formalizes this auction, making it transparent and capture-resistant.
Evidence: Flashbots' dominant market share on Ethereum post-Merge, often exceeding 80% of blocks, proves the economic inevitability of specialization. This mirrors the dominance of Citadel Securities in traditional equity market-making.
risk-analysis
THE NEW GATEKEEPERS
The Bear Case: Systemic Risks of Centralized MEV Curation
The rise of centralized MEV supply chains like Flashbots creates systemic fragility, trading censorship-resistance for temporary efficiency gains.
01
The Searcher Cartel Problem
Dominant builders like Flashbots and bloXroute control >80% of Ethereum blocks, creating a permissioned club. This centralizes the discovery and execution of profitable transactions, stifling open competition and innovation.\n- Centralized Order Flow: Relayers become mandatory gateways for high-value transactions.\n- Barrier to Entry: New searchers face prohibitive capital and infrastructure costs.
>80%
Block Share
~$1B+
Extracted Value
02
Censorship as a Service
Builder centralization enables OFAC-compliance by default, where sanctioned addresses are excluded from blocks. This transforms neutral infrastructure into a political tool, violating Ethereum's credo.\n- Protocol-Level Risk: Core network property of censorship-resistance is outsourced.\n- Slippery Slope: Today it's OFAC addresses, tomorrow it could be any blacklist.
>50%
OFAC Blocks
0
User Choice
03
The Single Point of Failure
The Flashbots Relay and similar centralized components represent catastrophic liveness risks. If they fail or are attacked, the entire proposer-builder-searcher (PBS) supply chain grinds to a halt, threatening chain finality.\n- Liveness Dependency: Validators rely on a handful of relays for block proposals.\n- Attack Surface: A DDOS on major relays could cripple Ethereum block production.
~12s
Failure Impact
1-2
Critical Relays
04
Economic Capture & Value Leakage
Centralized curation enables rent extraction by middlemen, siphoning value that should accrue to validators or users. This creates misaligned incentives and reduces network security budget.\n- Opaque Auctions: Searchers pay builders/relays off-chain, obscuring true MEV costs.\n- Validator Dilution: Proposer payments are minimized, weakening staking rewards.
-30%
Validator Yield
Opaque
Fee Markets
05
The Interoperability Bottleneck
Cross-chain MEV (e.g., via LayerZero, Axelar) is filtered through the same centralized curation points. This exports Ethereum's centralization risks to the broader multi-chain ecosystem, creating a systemic contagion vector.\n- Amplified Risk: A failure cascades across chains.\n- Universal Censorship: A single entity can blacklist addresses globally.
50+
Chains Exposed
1
Control Point
06
The Inevitable Regulatory Moat
Compliance-heavy MEV curation creates a regulatory moat for incumbents like Flashbots. New entrants cannot compete with the legal overhead, cementing the cartel. This leads to stagnation and kills the permissionless innovation that defines crypto.\n- KYC for Blocks: Future builders may require full user identification.\n- Innovation Winter: Regulatory risk stifles novel MEV research like SUAVE.
$10M+
Compliance Cost
0
New Entrants
future-outlook
THE INFRASTRUCTURE DILEMMA
The Path Forward: Can We Decentralize the Gatekeepers?
The very infrastructure built to decentralize blockchains is creating new, centralized points of control.
Flashbots and MEV-Boost are the new infrastructure gatekeepers. They control the flow of transactions and value extraction for the majority of Ethereum blocks, creating a centralized relay cartel.
Decentralization is a coordination problem. A truly decentralized block builder network requires solving complex problems in latency, data availability, and trust, which protocols like SUAVE attempt but have not yet scaled.
The risk is systemic capture. If a few entities like Flashbots, bloXroute, or Manifold control block building, they can censor transactions or extract maximal value, undermining the network's credibly neutral base layer.
Evidence: Over 90% of Ethereum blocks are built via MEV-Boost relays, with the top three relays consistently controlling more than 60% of the market share, creating clear centralization vectors.
takeaways
MEV & SEQUENCER CONTROL
TL;DR for CTOs: The Non-Negotiable Insights
The infrastructure for transaction ordering is the new battleground for network sovereignty and user value capture.
01
The Problem: Liveness Reliance on Centralized Sequencers
Rollups like Arbitrum and Optimism outsource sequencing to a single entity for simplicity, creating a single point of failure and censorship. This contradicts decentralization promises and creates a regulatory honeypot.
- Risk: A sequencer halt freezes the chain.
- Reality: ~100% of L2 transactions are ordered by a central party.
~100%
Centralized Txns
1
Failure Point
02
The Solution: Permissionless Block Building (SUAVE)
Flashbots' SUAVE aims to decentralize the MEV supply chain by creating a neutral, specialized chain for block building. It separates preference expression from execution, breaking builder monopolies.
- Mechanism: Users express intents, builders compete to fulfill them.
- Outcome: Reduces extractable value and democratizes block space.
10x+
Builder Competition
-90%
Extractable MEV
03
The New Gatekeeper: Builder APIs
Access to high-performance, MEV-aware block building is gated through proprietary APIs from Flashbots, BloXroute, and Eden Network. This creates a technical moat where optimal execution requires integration with these private services.
- Control: They decide transaction inclusion and order.
- Dependency: Major protocols like Uniswap and Aave rely on them for user protection.
$1B+
MEV Extracted
3
Dominant Builders
04
The Architectural Shift: Intents Over Transactions
The endgame is users submitting intents (desired outcome) not transactions (specific execution path). Protocols like UniswapX, CowSwap, and Across use solvers competing in a Dutch auction. This moves complexity off-chain and commoditizes execution layers.
- Benefit: Better prices, guaranteed execution, gas abstraction.
- Threat: Centralizes routing logic in solver networks.
~30%
Better Prices
0
Failed Txns
05
The Regulatory Attack Vector: OFAC Compliance
MEV relays like Flashbots can and do censor OFAC-sanctioned transactions. This turns neutral infrastructure into a compliance tool. Decentralized sequencing is no longer just about performance; it's a censorship-resistance requirement.
- Evidence: >50% of Ethereum blocks are OFAC-compliant post-Merge.
- Implication: Builders, not validators, enforce blacklists.
>50%
Censored Blocks
OFAC
Enforced By Builders
06
The Valuation Driver: Capturing the MEV Supply Chain
The entities that control the flow of transactions and value extraction will capture the fees. This is why Flashbots, Jito Labs, and EigenLayer (via EigenDA and shared sequencing) are building vertically integrated stacks. It's a land grab for the financial plumbing of all blockchains.
- Stake: Control over $1B+ annual MEV and all transaction fees.
- Strategy: Own the mempool, the builder, and the data availability layer.
$1B+
Annual Revenue Pool
Vertical
Integration Moats
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