Are TEEs the secret weapon for squashing MEV chaos and building truly decentralized blockchains? Or are we just swapping one central point of failure for another by trusting hardware giants like Intel?

Join us for the MEV Space #3: TEEs in Blockchains — Trust, Decentralization, and Market Design, as we delve into these critical questions and more!

MEV Space brings together the sharpest minds in crypto to dissect the evolving MEV landscape.

We’ll examine the role of TEEs in revolutionizing MEV auctions and enabling decentralized block building while exploring potential vulnerabilities and long-term viability. Get ready for a thought-provoking discussion on the future of blockchain technology and the delicate balance between trust, decentralization, and regulation.

During this talk, we have these thought leaders:

• Shea Ketsdever, Product Lead at Flashbots.
• Chua Zheng Leong, Co-Founder at Automata Network

Blair Marshall, MEV Solution Architect of Fastlane, will be our co-host again.

Here are the topics we will discuss.

• Given the inherent trust in hardware manufacturers when using TEEs, can we truly consider MEV auctions run within TEEs to be “trustless” and sufficiently decentralized?
• What security considerations and safeguards can enhance TEE-based MEV auction implementations?
• Considering the argument that TEEs are a good short-term solution for achieving both performance and decentralization in areas like MEV auctions and block building, how long will this “short term” last, and how might TEE technology evolve alongside competing solutions like MPC or FHE in MEV auction design?
• How can TEE-based partial block building complement other approaches like deterministic algorithms and advanced cryptography?
• What design principles can optimize TEE integration in partial block building for security and decentralization?
• Suppose TEE technology becomes dominant among validators and block builders, exceeding 51% adoption, and regulators respond with compliance requirements demanding greater data transparency. How can we reconcile the inherent privacy features of TEEs with the need for regulatory oversight?

The Twitter Space will be held at 8 pm EST, Feb 19. Feel free to set up your reminder!

You can also click this link or open https://bit.ly/hfdefi to download the free ebook Head First DeFi, Decoding the DNA of Crypto Transactions & Strategies.

Follow us via these to dig more hidden wisdom of DeFi:

EigenTx | Website | Discord | Twitter | YouTube | Substack | Medium | Telegram

As the DeFi space evolves, so do the strategies, risks, and opportunities that define it. At EigenPhi, 2024 has been a year of deep exploration into the mechanics of MEV, Builders’ bidding wars, searcher-builder integration, and cutting-edge crypto strategies. Through our Substack, we’ve unpacked the most impactful events and insights that shaped the crypto landscape, from Solana’s arbitrage potential to Ethereum’s MEV masterminds, like Jaredfromsubway.eth 2.0.

In this annual review, we revisit the five most-viewed articles, each providing invaluable lessons for traders, developers, and DeFi enthusiasts. Let’s dive into the stories that captured the attention of the crypto world.

Here is the most viewed post.

Metamorphosis of Jaredfromsubway.eth: cunninger Jared 2.0 with more layers

Jared 2.0, an evolution of the infamous MEV bot jaredfromsubway.eth, has emerged with sophisticated multi-layered sandwich attacks. The bot employs advanced tactics, including complex token routing paths, multiple intermediate tokens in transactions, and deliberately obscured profit calculations to avoid detection. It began operations on August 1, withdrawing $2.2 million to associated addresses, and uses variable activity patterns to mask its operations. The new bot’s enhanced strategies make analyzing and tracking profitability more difficult than its predecessor.

MEV on Solana has gained a great deal of attention, illustrated in the views of the next post.

Solana’s Triangular Arbitrage Explored: A Case Study on Jito

The article analyzes triangular arbitrage on Solana’s Jito network through two key transactions. The strategy involves exploiting price differences across three trading pairs simultaneously, with traders using Jito’s block engine for optimal execution. A notable case study showed how arbitrageurs leveraged price discrepancies between SOL/USDC, BONK/USDC, and BONK/SOL pairs for profit. The analysis highlights Solana’s high-speed capabilities and Jito’s specialized infrastructure in facilitating complex arbitrage strategies.

While Solana is getting hot, some searcher-builders have been raking fortunes for several months.

MEV Maestro Yoink Netting $2.65M on 59 Blocks in August

Yoink demonstrated sophisticated MEV extraction through multiple advanced tactics: leveraging flash loans up to 4,251 ETH to exploit 1inch limit orders, combining white hat security exploits with arbitrage opportunities, and executing complex multi-venue trading strategies. Their searcher-builder integration enabled dense block packing with multiple MEV transactions, achieving an impressive 18 ETH average profit per block. Key strategies included flash loan arbitrage, strategic liquidations during market volatility, and sophisticated token routing across multiple venues.

Calculating an MEV’s Profit and Loss is not easy. This post from our research team gives you an algorithm to start with.

How Do We Calculate the Profit and Loss of an MEV Transaction?

The article outlines a sophisticated approach to calculating MEV transaction profitability through a 10-step process. Key technical aspects include tracking multi-token balance deltas across transactions, incorporating builder payments into profit calculations, and considering both ETH and USD denominated values. The methodology demonstrates how advanced MEV operators must account for multiple cost layers: direct gas costs, builder payments, and token value changes. This comprehensive calculation framework helps optimize MEV strategies by providing accurate profitability metrics.

As the Dark Forest of Crypto, MEV is not that dark for builders. You could call it clear as day, which motivates the beaver to work with Jared to benefit itself.

BeaverBuild’s $476K Profit in 45 Days: Backrunning BananaGun via Jaredfromsubway

BeaverBuild employed sophisticated MEV tactics by leveraging its position as a block builder to execute coordinated backrunning strategies. Their advanced approach included using identical calldata to Jaredfromsubway.eth’s bot, capturing dual revenue streams through priority fees, back-running arbitrage, and strategic transaction positioning. The operation generated $476K over 45 days, primarily through backrunning BananaGun’s transactions. Their technique demonstrates advanced builder-level MEV extraction by combining privileged transaction visibility with coordinated backrunning execution.

These are the top 5 posts of 2024. In the coming days, we will review our past research in 5 categories:

• Searcher-builder
• Bidding War of Builder
• MEV Builder Strategies
• Transaction Analysis
• Ecosystem Crisis

Stay tuned!

Click this link or open https://bit.ly/hfdefi to download the free ebook Head First DeFi, Decoding the DNA of Crypto Transactions & Strategies.

Follow us via these to dig more hidden wisdom of DeFi:

EigenTx | Website | Discord | Twitter | YouTube | Substack | Medium | Telegram

In the first 11 months of 2024, three powerhouse searcher-builders — MEV Frontrunner Yoink, C0ffeebabe.eth, and Turbobuilder — pulled in a staggering 9K ETH tips from just 13K transactions, including hacks, arbitrages, and liquidations. Searcher-builder integration has become a phenomenon the Ethereum ecosystem can’t afford to ignore.

The growing prevalence of searcher-builder integration has emerged as a key factor in how MEV is extracted and distributed in the Ethereum ecosystem. What started as a natural evolution in the PBS ecosystem has become dominant, raising important questions about market dynamics, privacy considerations, and ecosystem health. From Shutter Network’s work on privacy-preserving solutions to Sorella’s research on MEV capture and the deep insights into order flow dynamics, our speakers today represent different angles of this complex puzzle.

Co-host: Blair Marshall, MEV Solution Architect of Fastlane.

Speakers:

• Luis Bezzenberger, founder of Shutter Network.
• David Phillips, Order Flow expert.
• Yuki Yuminaga, Founding Research and Growth of Sorella Labs, Research Partner of Fenbushi Capital.

We will discuss:

• How do you calculate the actual net income of a builder?
• The impact of searcher-builder integration on the health of Ethereum.
• How would you evaluate the effect of Inclusion Lists solutions on searcher-builder integration? I.E., FOCIL or MCP.
• Are TEE and BuilderNet helpful in relieving damages?
• If the only way to survive as a small builder is to become a searcher-builder, what changes must happen to stop this trend?

Visit this link to set up your reminder at 1:30 pm EST, Thursday, December 19th.

Meanwhile, please check out our recap of the first MEV Space.

Click this link or open https://bit.ly/hfdefi to download the free ebook Head First DeFi, Decoding the DNA of Crypto Transactions & Strategies.

Follow us via these to dig more hidden wisdom of DeFi:

EigenTx | Website | Discord | Twitter | YouTube | Substack | Medium | Telegram

Key Takeaways

- Just two builders control 95.7% of Ethereum’s MEV-Boost block-building market, hijacking the whole ecosystem.

- A $10M investment in Bitcoin Mining generates $180K daily, more than 20 times the amount of money put into Ethereum block-building.

- Builder centralization costs validators up to $60 million in 10 months.

- Private order flows constitute 80% of block value, inaccessible to new builders who can’t afford to subsidize 7.4 ETH per month.

- 90% via stochastic block rewards and 10% redistributing are a good start to solve the crisis.

From Stake Diversity to Builder Monopoly

On September 15, 2022, Ethereum finished its most important upgrade: the Merge, along with the implementation of Proposer-Builder-Separation, PBS, the goal of which is to increase transaction processing efficiency via specialized roles.

After the merge, the consensus system transitioned from Proof-of-Work, PoW, to Proof-of-Stake, PoS, which created a diversified staking landscape, illustrated in the chart below from the Builder Performance Analysis dashboard. It shows a diversified validator landscape from Sept 2023 to Aug 2024.

However, the key phase of interest allocation is not up to stakers. Instead, it’s hijacked by very few top builders, who control the influx of transactions, including degens’ snipping, market makers’ solving, and, most importantly, searchers’ MEV strategies.

The charts on mevboost.pics show that the top 2 builders are pushing other players out of the market. In the past two weeks, they have taken 95.7% of the total MEV-Boost block market, and their reward has been steadily around 90% of the total during the last 30 days.

The current monopoly has grown out of the winner-take-all design of Ethereum, which rewards the ONLY builder who finds the most MEV-optimized transaction order. At the same time, other builders — who also invest significant resources and may come close to an optimized solution — receive absolutely nothing.

This concentration stands in stark contrast to the diverse ecosystem that Ethereum’s builders could and should be. Let’s examine what we’re losing through this centralization and why builder diversity is crucial for the network’s health.

Disappearance of Builder Diversity

A more diverse builder ecosystem delivers tangible benefits across multiple dimensions and creates a healthier innovation environment.

In the ideal world, from an economic perspective, the diversity of builders leads to more robustness and better anti-fragility against unexpected disruptions, which is critical for the network’s security. Different builders may specialize in different MEV extraction and transaction ordering strategies, yielding more efficient value capture and better price discovery. This diversity also guarantees that no single builder can censor transactions, and the geographic distribution of block production enhances network resilience.

Perhaps most importantly, lower barriers to entry and more accessible private order flows mean that new builders could join the ecosystem and contribute fresh perspectives, creating a competitive landscape fostering continuous improvement and preventing the vertical integration pressures we see today.

The two above charts from mevboost.pics show you the formation of the current centralization. Ethereum used to have a hugely diversified builder landscape right after the Merge. No builders could dominate the block-producing and take all the rewards. To keep Ethereum safe and stable, everyone has their contribution, which, sadly, did not generate fair rewards for most of them. Only one winner could get paid for outbidding others. A collaborative system in the real world has a distinct incentive structure.

While the benefits of builder diversity are clear, Ethereum’s current design actively works against maintaining this healthy ecosystem. The root cause lies in its winner-take-all mechanism, which fundamentally misaligns incentives for participation.

Winner-Take-All: Systematic Neglection

As Time advances to 2024, the arena of builders, under the rule of the winner-take-all, has totally changed, favoring a select few builders.

When you look at the bidding process of a block, it’s easy to see how intense the competition is. Many builders provide close bids, indicating they are as good as each other on transaction order optimization. It’s just like the world’s best top 10 Chess Grand Masters, whose point gaps are usually 2 or 3.

However, unlike the winning builder of a block, being rewarded with all the returns, the Grand Master can’t receive all the bonuses of the tournament they just triumphed. Other players have the right to get their slices of the cake. And like all competitive sports, randomness, or what you could call luck, plays a critical role in deciding which Grand Master becomes the champion. Be it a hot day, some traffic jam caused by a small accident, or maybe just some unclean leaf in the green salad.

The attraction and thriving ecosystems around Chess and all competitive sports come from the instilled unpredictable elements, sharply opposed to Ethereum’s winner-take-all certainty, which would make all sports dull. Even GOATs like Messi and Michael Jordan cannot win all the matches and titles. They are always under the influence of randomness, as all athletes do.

The fundamental flaw in Ethereum’s design becomes clear through another simple analogy: commercial aviation. Consider how airlines structure their flight operations:

• The Captain and First Officer both receive compensation for their expertise.
• Each crew member has clear value recognition and career progression.
• Safety and efficiency come from collaborative incentives.
• Experience accumulation is rewarded at all levels.
• Backup systems and redundancy are valued and maintained.

This proven model also radically differs from Ethereum’s winner-take-all approach, where only the highest bidder receives compensation, regardless of others’ contributions to network security and efficiency.

Bitcoin’s mining ecosystem offers a compelling alternative. While only one miner wins each block reward, the system evolved to value and compensate all participants through mining pools. Small miners can earn steady income proportional to their contributed work, even if they never win a block directly. This collaborative model maintains competitiveness while ensuring sustainable participation at all scales — starkly contrasting Ethereum’s current builder market, where runners-up receive nothing despite significant contributions.

Assuming you have $10M in hand and want to join a Bitcoin mining pool, the daily revenue from the $10M would be $180K, considering the current Bitcoin price being $93K. Even if it were re-adjusted to $60K, the daily revenue would still be $120K. That is to say, the APY is in the range of 438% to 657%.

Path to Monopoly: A Self-Reinforcing Cycle

Like an airline choosing to fly with minimal crew to save costs, Ethereum’s current system sacrifices long-term security and efficiency for short-term economics. Without proper incentives for all participants, the system naturally tends toward monopoly, exhibiting declining competition and growing entry barriers.

This dangerous trend is already visible: in Sept 2023, Blocknative, one of the OG builders, quit building and suspended its relay for better “economically viable opportunities.”

In two years, Blocknative received $34M in funding. It’s reasonable to assume that they invested $10M into being a builder since block-building was one of the biggest Unique Selling Points of Blocknative. Let’s calculate whether $10M could sustain a legit builder business.

Our Builder Performance Analysis dashboard shows that Blocknative earned 4.62K ETH as builder rewards, composed of priority fees and builder tips, on building 43.3K blocks during the first 8 months of 2023. However, Blocknative had to pay validators 5.37K ETH to win those blocks. The 750 ETH deficit urged Blocknative to rethink, and then we all saw the result.

Blocknative quit in Sept 2023. The current builder market is much more competitive. Let’s say $10M can earn you 1% of the overall share. According to Relayscan.io, after deducting the subsidy for validators, the overall profit of the last 7 days is 1.8K ETH, which means $10M can get you 2.6 ETH per day, worth $8.23K, less than 1/20 of Bitcoin mining daily revenue.

No wonder many small builders follow the Blocknative approach, as shown in this figure.

The bars in the figure display rewards received from public transactions by builders each month from Sep 2023 to Aug 2024. Different colors in each bar indicate different builders. Public transactions are essential for small or new builders since they hardly have access to ever-growing private order flows. The diminishing trend of small builders is obvious, with the bars becoming monotonous, signifying the block-building power concentration.

For new builders to access private order flow, they have a “chicken and egg” problem from the harsh reality: about 80% of block value comes from private order flows, largely inaccessible to new entrants.

Builders need private order flows to win blocks but can’t access these flows without significant market share, which becomes a pressure point. A recent study shows new players must subsidize up to 7.4 ETH per month to achieve the minimum 1% market share required by key order flow providers like MEV Blocker. This cost continues to rise as dominant builders strengthen their position.

Moreover, even if you have $10M as the starting fund, it would become the sunk cost with high possibility. Because newcomers must join the unfair resource game of essential infrastructure, which requires high technical and capital costs to match the incumbent’s high-end servers, superfast networks, and battle-tested software and teams, and don’t forget to calculate the $120K revenue of Bitcoin mining as the opportunity cost.

In a fairer ecosystem, small players and newcomers should receive subsidies for their endeavors in diversity and innovation. Ethereum’s failure to do so facilitates the current natural monopoly, manifested in measurable, significant losses for the entire ecosystem. Recent studies have quantified these costs, revealing the true price of builder centralization.

$60 Million in Losses and Inefficiencies from Monopoly

Lately, studies have articulated financial setbacks across the board due to builder centralization.

According to the paper Decentralization of Ethereum’s Builder Market, validators and proposers suffer notable losses, ranging from 5.6% to 11.5%, due to inequality in block-building capacities. An additional 0.5% to 1.7% of losses come from uncompetitive auctions, where only a few large builders dominate. These amount to 9.8K ETH to 21K ETH for all validators, worth $30 million to $60 million in the first 10 months of 2024.

The hypothetical efficiency that is supposed to arise from the winner-take-all design encourages monopoly, causing inefficiency during auctions because of less effective competition, as revealed in the same study.

The paper provides clear empirical evidence that 24.9% of all bidding auctions operate sub-optimally. Moreover, while private order flows constitute about 80% of block value, access remains limited to established players.

These numbers show that the monopoly market structure stifles innovation, and new builders’ novel approaches and technologies are being locked out of the market, thus never getting a chance to prove themselves.

The winner-take-all embedded PBS design was well intended to democratize MEV extraction. Still, the consequences emanate signs of instability as validators face mounting losses. This is particularly concerning because it distorts the MEV measurement system, making it increasingly difficult to implement crucial protocol improvements.

In turn, a complex web of interrelated challenges compounds over time. Protocol designers now work with increasingly constrained options for future upgrades, as any changes must navigate the entrenched interests of monopolizing builders. The network’s decentralization mechanisms become less effective each month, creating a feedback loop where centralization reinforces itself through technical and economic channels.

Most critically, this centralization poses an existential threat to Ethereum’s role as critical infrastructure for the entire cryptocurrency ecosystem. As the platform that powers most DeFi and other blockchain applications, Ethereum’s builder centralization introduces systemic risk for thousands of dependent projects and millions of users. The concentration of power raises serious regulatory concerns, potentially attracting unwanted scrutiny that could affect the entire crypto industry.

These mounting losses and systemic risks demand immediate attention. Fortunately, we don’t need to reinvent the wheel — successful models for fair value distribution already exist across various industries and systems.

Building Better For All with Stochastic and Redistribution

Examples of Sports and Bitcoin Mining tell us that the uncertain elements of a system appeal to more participants, not Ethereum’s sureness of winner-talk-all, which ignores most members’ contributions, smothers diversity and innovation, and introduces the existing and worsening natural monopoly.

To escape the current predicament, we must incorporate stochastic components on block rewarding mechanisms to promote diversity. 90% is a good parameter regarding the present monopoly.

Next, we can redistribute the remaining 10% to re-align interests and benefits for all roles in the system based on their contributions. Consider Airlines recognizes that travelers’ safety and positive flight experiences depend on the captain, first officer, and all crew members being properly incentivized and rewarded for their efforts.

These mechanism modifications would demonstrate to the community that Ethereum is willing to make deliberate design choices to nurture competition and innovation to facilitate a sustainable economic system.

Ethereum needs to recognize the contributions of all participants; it cannot focus only on the numerator and ignore the denominator.

Click this link or open https://bit.ly/hfdefi to download the free ebook Head First DeFi, Decoding the DNA of Crypto Transactions & Strategies.

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Understanding the microstructure of DeFi transactions and strategies is crucial for optimizing financial outcomes, managing risks effectively, and leveraging the full potential of decentralized finance in a rapidly evolving market. This is the goal of our latest E-book — Head First DeFi: Decoding the DNA of Crypto Transactions & Strategies.

Here is the foreword of it.

“In the end, banking is a very good business unless you do it poorly.”

— Warren Buffett

$418 million — that’s the worth of spot Bitcoin ETF shares owned by Goldman Sachs as of August 14th, 2024. At the same time, the global crypto market cap is over $2 trillion. It seems like Goldman Sachs executives are taking DeFi more seriously as part of the banking business. Whether they truly understand the fundamentals of DeFi is another question.

Uniquenesses of DeFi: Building Blocks of a New Financial Era

DeFi is not just a variation of Traditional Finance (TradFi); it’s a whole new ball game. Its core features, including atomicity, composability, permissionlessness, and determinism, set it apart. These features create a more efficient, flexible, transparent, and inclusive financial ecosystem. The unique features of DeFi are not only innovative but also hold the potential to reshape the financial industry.

Atomicity: The Unbreakable Chain

In DeFi, atomicity ensures that transactions are either fully executed or not at all, eliminating the risk of partial execution and its associated losses. Simply put, it’s like a vending machine- you either get your snack or your money back; there’s no in-between. This resembles escrow services in TradFi, where funds are only released when all conditions are met. However, DeFi’s atomicity offers greater efficiency by removing intermediaries. For instance, in “How Enso Solves 73.5ETH in 116 Steps in One Transaction,” atomicity is crucial in ensuring that a 117-step transaction is completed seamlessly between over 40 trading venues via 25 assets.

Composability: The Financial LEGO Set

Composability in DeFi enables seamless interaction between protocols and applications, allowing the creation of complex financial instruments by combining various services and products. It mirrors financial engineering in TradFi, which integrates different financial products. DeFi’s composability, akin to ‘money legos,’ is powered by the programmability of digital assets on the blockchain through smart contracts, making these assets verifiable and traceable. Unlike traditional assets, digital assets in DeFi can perform a wide range of functions, offering broad and flexible financial significance across platforms.

You can find its demonstration in the case “Swinging for Profits: The BANANA Cross-Chain Arbitrages via ApeSwap and Other DEXs,” which highlights how composability enhances liquidity and optimizes returns through sophisticated arbitrage strategies executed via ApeSwap, a popular DeFi platform, on both BNB Smart Chain and Polygon using Anyswap bridge, Curve and Balancer on BNB Smart Chain, and Uniswap V2 on Polygon. Combined with atomicity and shown in the previous Enso case, DeFi’s composability offers more flexibility, enabling real-time integration across platforms.

Permissionlessness: The Open Gateway

The permissionless nature of DeFi allows unrestricted access to financial services, in contrast to TradFi, where eligibility criteria often restrict access. This democratizes finance, making it accessible globally without barriers and creating a lifeline for crypto users in Argentina and Venezuela. In “With NFT Arbitrage, Someone Was Snipping Your BabyDoge, a user executed an NFT arbitrage without needing approval from any centralized authority, illustrating the open-access nature of DeFi and its potential to foster innovation across borders.

Determinism: The Crystal

Determinism in DeFi ensures that transactions, given the same inputs, produce predictable and transparent outcomes, enhancing security and trust in a decentralized environment. It’s like a step-by-step recipe; if you follow the steps, you’ll get the same dish every time. This predictability is crucial for accurate profit calculation and risk management. The transparency of on-chain transactions further reduces the risk of hidden fees, as each step is visible and verifiable. The case “A $3.2 Million Profit Arbitrage Triggered by the $190M Nomad Bridge Hack. ” exemplifies how determinism enables precise profit outcomes, demonstrating the reliability and transparency of DeFi transactions.

Nevertheless, with all these novelties come challenges as well. Questions need to be answered to reach the one billion users.

Challenges and Dilemmas: Can DeFi Overcome These Key Hurdles?

As DeFi continues to innovate and expand, it faces significant challenges that must be addressed to ensure its long-term success and stability. The following sections explore these hurdles, posing critical questions highlighting the complexities of operating in a decentralized financial ecosystem. From balancing innovation with security to achieving stability in lending protocols, these challenges underscore the need for thoughtful solutions to drive DeFi forward.

Asset Issuance Mechanisms: How to balance innovation with security?

DeFi’s decentralized nature introduces complexities in asset issuance, where token offerings and staking replace traditional methods like central bank security issuances and IPOs. TradFi’s asset issuance is heavily regulated, ensuring transparency and security. DeFi, lacking such oversight, faces challenges in maintaining these standards.

Flash loans exemplify the asset issuance risks in DeFi, where rapid, uncollateralized borrowing can exploit system vulnerabilities. In 2023, Euler Finance suffered a $197M exploit due to flash loans. Even the Ethereum Foundation Couldn’t Escape the Claw of This Flash-Loan-Enabled Sandwich MEV.

Our framework has shown that the token dynamics of blockchain follow the theory of a tokenomic trilemma: being difficult simultaneously to achieve three conditions of free tradability, anchored price, and independent issuance. DeFi’s issuance mechanism must balance innovation with the need for secure and fair processes to protect investors and maintain market integrity.

Liquidity Assessment and Derivative Valuation: How to piece together fragmented liquidity?

In the decentralized world of DeFi, traditional liquidity assessment and derivative valuation models are less applicable, leading to challenges in accurate pricing. Liquidity fragmentation across various pools and platforms in DeFi leads to significant price discrepancies, making it difficult to assess overall market liquidity and further complicating derivative valuation. Additionally, the high volatility in DeFi markets, driven by rapid changes in supply and demand, exacerbates these challenges. , as seen in “Arbitrage Strategies Centered on Autonomous Minting and Burning of Synthetic Tokens,” where the dynamic nature of these synthetic assets, influenced by fluctuating market conditions and decentralized oracles, complicates the valuation process, making traditional methods insufficient. This case highlights the need for new approaches to derivative pricing that consider the unique properties of DeFi.

Lack of Settlement Models: How to create standardized processes to reduce uncertainty?

One of DeFi’s fundamental challenges is the absence of standardized settlement models, complicating the finalization of transactions. In TradFi, standardized settlement processes ensure clear reconciliation and reduce disputes. The absence of standardized settlement models in DeFi complicates asset settlement and dispute resolution and poses broader systemic risks. Unresolved disputes can escalate, potentially leading to larger market disruptions and loss of confidence in the ecosystem, as highlighted in “ Coffeebabe.eth’s Masterstroke: $5.4M Arbitrage During the Vyper-Curve Exploit.” This case illustrates how the absence of clear settlement models can lead to rapid exploitation and complex settlement disputes, as the exploit took advantage of a lack of clear reconciliation processes.

Lending Protocols: How to mitigate risks with TradFi-level stability?

DeFi lending protocols face significant challenges in managing collateralization and ensuring security against attacks. TradFi regulates lending with credit checks and collateral requirements, reducing risks. DeFi’s reliance on over-collateralization as a risk management tool often leads to capital inefficiencies in the absence of credit checks. Additionally, the dependence on oracles introduces a single point of failure, making lending protocols vulnerable to manipulation and security breaches. The Defect in a Lending Protocol’s Oracle Module Exploited for Profit shows how vulnerabilities in oracles, critical for determining collateral value, can be exploited to manipulate the lending process, leading to inaccurate collateral assessments and security breaches.

As DeFi continues to evolve, addressing these challenges will ensure its growth and integration into the broader financial landscape.

Decoding DeFi: Your Guide to Navigating the Future of Finance

This Head First DeFi Transactions and Strategies booklet is crucial in understanding DeFi’s key features and challenges. It dissects real-world case studies to provide valuable insights into the mechanics, opportunities, and risks inherent in DeFi strategies. Whether you’re a beginner looking to understand the basics or an advanced trader seeking to refine your strategies, these case studies offer practical knowledge to navigate the DeFi landscape.

As DeFi continues to evolve, it’s essential for participants at all levels — from individual users to institutional players like Goldman Sachs — to deeply understand its fundamentals. These innovations are shaping the future of finance, and staying informed is key to capitalizing on opportunities and mitigating risks.

We encourage you to dive deeper into the case studies at https://bit.ly/head-first-defi and actively engage with the DeFi community. Share your insights, submit transactions you want to understand and contribute to the ongoing dialogue. By collectively exploring and addressing the challenges and possibilities of DeFi, we can work towards a more inclusive, efficient, and innovative financial future.

The journey into DeFi is just beginning, and your participation can help shape its trajectory. Let’s decode the DNA of Decentralized Finance together, one transaction at a time.

Click this link or open https://bit.ly/hfdefi to visit the latest booklet: Head First DeFi, Decoding the DNA of Crypto Transactions & Strategies.

Follow us via these to dig more hidden wisdom of DeFi:

EigenTx | Website | Discord | Twitter | YouTube | Substack | Medium | Telegram

In the quiet corners of rural Asian markets, an age-old tradition persists. Two traders stand close, hands hidden within long sleeves, fingers dancing in secret communication. This is “sleeve bidding,” a centuries-old method of discreet price negotiation. While quaint, this practice holds a surprising parallel to one of the most powerful forces in today’s cryptocurrency markets: private order flow.

Recent data has revealed a startling fact: Private Order Flow contributes to a staggering 90% of builder income, $642.5M since last Sept 1, in the crypto space. This isn’t just a significant statistic; it’s a revelation that reshapes our understanding of how the crypto market truly operates.

Much like those hidden hands in sleeve bidding, private order flow in crypto operates behind the scenes, invisible to the average trader yet wielding enormous influence. What does this mean for the crypto ecosystem? How has a practice that echoes an ancient trading technique come to dominate one of the most technologically advanced markets in the world?

Let’s pull back the sleeve, so to speak, and examine how private order flow has become the hidden giant of crypto trading, driving the majority of builder income and shaping the market in ways that most participants never see.

How Much Value Went Through The Sleeve?

According to Blocknative, private transactions now account for about half of the total on Ethereum, in terms of the total gas usage. Our Builder Performance Analysis Dashboard on Dune sheds light on more details.

Since 2023.9.1, BeaverBuild has consistently dominated, handling 44.3% of all private transactions. The top 3 builders (BeaverBuild, Titan, and Rsync) collectively have processed over 90% of the transactions in private channels, with Titan 29.5% and Rsync: 17.7%. These numbers and the by-week time series are shown on the left side of the charts below.

The charts on the right show that BeaverBuild has 37.1% of all public transactions, while Titan has 26.1% and Rsync has 20.1%. In total, the top three have 83.3% of the public market.

Still, we need to answer questions like:

• How much exactly do these order flows bring to builders?
• What does it compare with public transactions?

When you look at the Builder Rewards Over Time charts of Public v.s. Private, a general idea is that dark pools usually provide 8 to 10 times rewards of public ones.

We will present the exact amount after the analysis of the market shares.

During the last 12 months, you can see the top 3 builders’ rewards market share and Public vs. Private. in these donut charts:

The exact market shares are:

• Total: BeaverBuild — 39.1%; Titan — 27.2%; Rsync: 18.3%
• Private: BeaverBuild — 39.3%; Titan — 27.3%; Rsync: 18.3%
• Public: BeaverBuild — 36.6%; Titan — 26.2%; Rsync: 18.7%

Builder rewards are composed of 2 parts: priority fees and miner tips. We can split the above shares into more charts.

For the Priority Fee market, here we have:

• Total: BeaverBuild — 44.2%; Titan — 26.1%; Rsync: 18.5%
• Private: BeaverBuild — 45.8%; Titan — 26.1%; Rsync: 18.3%
• Public: BeaverBuild — 37.3%; Titan — 25.8%; Rsync: 19.3%

Next is the Miner Tips market.

• Total: BeaverBuild — 33.4%; Titan — 28.4%; Rsync: 18.2%
• Private: BeaverBuild — 33.5%; Titan — 28.4%; Rsync: 18.3%
• Public: BeaverBuild — 34.6%; Titan — 24.6%; Rsync: 19%

However, these percentages have changed over the last 12 months. Take private builder rewards, for example. Titan and Beaver have split Rsync’s share as time passes.

Now let’s look at the amount these top 3 builders’ have earned.

Our tables show that during the last 12 months:

• BeaverBuild: Private-$252.8M; Public-$27.4M.
• Titan: Private-$175.4M; Public-$20M.
• Rsync: Private-$117.7M; Public-$14M.

We use $2,700 as the price of ETH.

Adding all together, Private Order Flows bring $642.5M income to all the builders, while $74.9M is generated from public mempools. In conclusion, 90% of all builders’ income comes from private channels.

The next table shows the percentage distribution of the top 10 earners of builder rewards, proving the overwhelming position of private channels.

Top 10 Performers Appraisal

Next, we can examine the top 10 performers in 6 categories, separated by Public and Private. We use abbreviations, as shown in the tables below.

• PF: Priority Fees
• MF: Miner Tips
• BR: builder Rewards

The number after the name is the amount corresponding to the category.

For the Private section. The 3 AVG categories are based on each builder’s included private transaction numbers.

• Besides all the big guys we mentioned above, the 3 AVERAGE metrics show that “I can haz block?” and “Ty For The Block” dominate in BR and MT.
• Meanwhile, “uwu builders,” “i can hav block,” and “nfactorial” shine when it comes to priority fees.
• It’s also worth noting that “bobTheBuilder,” “payload,” and “antbuilder” stand out in the private sector as well.

Here are the numbers of Private Transactions and Builder Rewards they’ve received since 2023.9.1.

• bobTheBuilder: 9,343, $2.8M;
• payload: 7,526, $1.1M;
• antbuilder: 4609, $332K.

Next is the public section, where traders put their orders in broad daylight.

We can see that:

• Of all the total metrics, the only category BeaverBuild is not the best is Public Miner Tips, at which Titan and Flashbots outperform.
• Titan is the only builder receiving more than $1M in Public Miner Tips.
• “smithbot” and “Ty For The Block” excel in the Average Public Builder Rewards Per Transaction category. “smithbot” is good at getting Public Priority Fees while “Ty For The Block” thrives on Public Miner Tips.

Combining both Public and Private data, it demonstrates:

• Jetbldr’s Middle-Tier Performance: Jetbldr earned $1.1M in Public BR and $1.8M in Private BR, maintaining a consistent, moderate performance.
• Gambit Labs’ Niche Role: Gambit Labs shows a stable but niche role with $693.9K in Public BR and $1.6M in Private BR.
• Antbuilder’s Consistency: Antbuilder ranks consistently in the average public PF ($0.83) and the average private PF ($14.72), indicating stable fee efficiency across both sectors.

Feel free to visit EigenPhi’s Builder Performance Analysis Dashboard on Dune to explore more data, including the above.

Hidden Flows, Visible Impact

The dominance of private order flows, contributing 90% of builder income, reveals a concerning trend toward centralization in the crypto market. This concentration of power in the hands of a few top builders contradicts the decentralized ethos of cryptocurrency. It creates potential for market manipulation, reduces transparency, and raises barriers for new entrants. The crypto community now faces a critical challenge: balancing the efficiency of private order flows with the need for a truly decentralized ecosystem. As we move forward, addressing this hidden centralization is crucial to ensure that cryptocurrency remains true to its original vision of open and democratic finance.

Next, we will examine how the $642.5M is distributed among proposers. Stay tuned.

Visit our Head First of DeFi to decode the DNA of DeFi Transactions & Strategies to learn more about the DeFi Lego.

Follow us via these to dig more hidden wisdom of DeFi:

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Why has Jaredfromsubway.eth been so successful for 18 months until today? His sandwich-making recipes emerge one after another, demonstrating Jared’s versatility and in-depth comprehension of DeFi mechanisms. Adding and removing liquidity, strategically moving assets from one trading venue to another, and acutely monitoring the public mempool enable their gains to outperform other sandwich bots.

Strategy One-liner

Jaredfromsubway.eth uses three transactions to cook two unique types of sandwiches: a swap-JIT sandwich and a split-front-run one.

Simplified Illustration

All transactions involved are in Block 18563314, occupying from Position 1 to Position 6.

The number after “TX” indicates the current transaction’s position on the block. We will use such representation below.

Big Picture

Swap-JIT Sandwich

https://bit.ly/3XG7Z8e

Split-Front-Run Sandwich

https://bit.ly/3Y6mVhD

Key Steps

We explain this strategy’s key steps by splitting them into two sandwiches, in which we use each transaction’s steps regarding the current sandwich for clarity.

Swap-JIT Sandwich

TX1: Swap-JIT Sandwich Front Run. Add ETH and GROK Liquidity, then swap GROK for ETH.

• This transaction serves two roles in this strategy: the front run of the Swap-JIT sandwich, composed of TX1, TX3, and TX4; the first of the two front-run transactions of the Split-Front-Run sandwich that is composed of TX1, 2, 4, 5, and 6.
• Steps 3 & 4: swap GROK for WETH in the Uniswap V3 pool.
• Steps 5–7: Add GROK and WETH liquidities to the Uniswap V3 pool. Visit this page to understand what happens when liquidity providers process liquidity in a Uniswap pool.
• Steps 3 & 4 and 5–7 increase the rate of GROK against WETH in the pool, making the transaction the front run of this Swap-JIT sandwich.

TX3: Swap GROK for ETH.

• This is the victim transaction of the Swap-JIT sandwich.
• Steps 2 and 3: The victim swaps GROK for WETH in the Uniswap V3 pool, suffering the loss under the influence of their slippage setting.

TX4: Swap-JIT Sandwich Back Run. Remove GROK and ETH Liquidity.

• This transaction also plays two roles: the back run of the Swap-JIT sandwich and the second of the two front-run transactions of the Split-Front-Run sandwich.
• Steps 3–9: Remove GROK and WETH liquidities from the Uniswap V3 pool.

Split-Front-Run Sandwich

TX1: Split Front Run 1. Swap WETH for ide.

• Steps 1 and 2 increase the rate of WETH against ide in the Uniswap V2 pool, making this transaction also operate as the front run of the first normal sandwich.

TX2: Victim TX. Swap ETH for ide.

• Steps 0–4: The victim swaps ETH for ide in the Uniswap V2 pool, suffering the loss of receiving less ide than they should be because of the front run done by Jaredfromsubway.eth.

TX4: Split Front Run 2. Swap WETH for ide.

• Steps 1 and 2 increase the rate of WETH against ide in the Uniswap V2 pool, making this transaction also operate as the front run of the second normal sandwich.

TX5: Victim TX. Swap ETH for ide.

• Steps 0–4: The victim swaps ETH for ide in the Uniswap V2 pool, suffering the loss of receiving less ide than they should be because of the front run done by Jaredfromsubway.eth.

TX6: Split-Front-Run Sandwich Back Run. Swap ide for WETH.

• This transaction acts as the back run of the Split-Front-Run sandwich.
• Steps 1 & 2: Jaredfromsubway.eth swaps back WETH with ide, pocketing the gain from the Split-Front-Run sandwich concerning the Uniswap V2 pool for WETH and ide.

Key Addresses

• The oval labeled “to MEV bot 0x6b75” is the sandwich contract used by Jaredfromsubway.eth.
• The pentagon labeled “from 0xae2…fae13” is the EOA of Jaredfromsubway.eth.
• All other pentagons labeled “from…” are victims’ EOAs.

Key Factors

Why the group of TX1, 3, and 4 is a sandwich instead of a JIT?

We placed TX3 of the sandwiched user at Position 1 of this block for simulation. The returned result showed success, and the user only needs to put in fewer GROK to exchange for 11 WETH in the sandwiched pool, which would happen if this were a JIT. In actual execution, the user incurred a loss because of Jared’s liquidity operations, effectively acting as the front run and back run of a sandwich attack.

Why did the adding liquidity action not mint a Position NFT?

By invoking the ABI, you can skip the minting of Position NFTs and directly add, remove, or adjust liquidity.

What’s the Profit and Loss of this strategy?

The intertwining of the two sandwiches makes the PnL calculation mind-boggling. To avoid confusion, we only give the results.

• The net gain of the Swap-JIT sandwich: 0.046 WETH and 3592 GROK.
• The net gain of the Split-Front-Run sandwich: 0.031 WETH.

Based on the contemporary prices, this strategy brings about $80 profit to Jaredfromsubway.eth.

Why was TX2 not put behind TX4?

We simulated putting TX2 to Position 1, and the result was that the victim could have received more ide with 0.1 ETH, proving this transaction suffered a loss caused by the Split Front Run 1 transaction.

However, when we put it to Position 5, the simulation failed, resulting from the victim’s slippage setting. Thus, Jaredfromsubway.eth could not bundle this transaction with TX5, the other victim, which was why Jaredfromsubway.eth had to split the front run into two transactions.

The amount of Split Front Run 1 has to ensure the success of TX2, whose same direction exchange also helped push up the price of ETH against ide. Our calculation proved that Jaredfromsubway.eth’s first Split Front Run’s swap amount WAS based on TX2’s slippage, demonstrating the attacker’s expertise.

Want to learn more about DeFi strategies to enhance your trading? Visit our Head First of DeFi to decode the DNA of DeFi Transactions & Strategies.

Follow us via these to dig more hidden wisdom of DeFi:

EigenTx | Website | Twitter | YouTube | Substack | Medium | Telegram

Where is Jared’s Bot?

If you’ve been following Jaredfromsubway.eth, the biggest Sandwich MEV Attacker, and one of the top 3 traders on Uniswap behind Wintermute and Beaverbuild, you would know that Jared had been using this contract address — 0x6b75d8af000000e20b7a7ddf000ba900b4009a80 — to make his sandwiches. However, our dashboard showed that the bot’s trading volume and profit have plunged since August 7th and have fallen to zero since the 14th.

Even though, using our Builder Rewards Analysis by Bot Dune dashboard, you can see that, in 2 weeks starting from Aug 1, this bot has given out 851 ETH, worth $2.2M, using today’s ETH price, as builder rewards via 51,187 transactions.

Among all the builders, beaverbuild received the most rewards, 686 ETH, worth $1.76M via 30K transactions.

Next in line is Titan, who collected 129 ETH, worth $331K, from Jared via 16K transactions.

Our Dune dashboard also shows that of the 51,187 transactions, Jared sent 51,032 via public channels and 155 via private conduits.

With all this being said, it doesn’t mean Jared has stopped making sandwiches. During the past 2 weeks, we have noticed an emerging MEV contract rampaging with all kinds of new on-chain trade squeezing methods.

The new contract — 0x1f2f10d1c40777ae1da742455c65828ff36df387 — was created by the same EOA that produced the old bot. Our sandwich attacker profile shows it has cooked about 40K sandwiches, which generated 765 ETH rewards for the builders, with beaverbuild receiving 526 ETH and Titan 209 ETH.

New Bot, New Recipes, New Flavors

The new bot has upped his game with new tricks. Take the 5-layer sandwich, shown in the image below, as an example.

• In the front piece transaction, at Pos 2 of Block 20540857, the bot swapped 194,132.885 USDT for 73.8917 WETH, raising the exchange of USDT/WETH in the Uniswap V3 pool.
• In victim TX 1 at Pos 3 of the same block, the first victim suffered a loss by swapping USDT for WETH in the Uniswap V3 pool with a higher rate.
• In the centerpiece transaction at Pos 4, the bot swapped 289,109.1702 USDT for 108.9744 WETH, raising the rate again.
• The user in victim TX 2 got ripped off again with an even higher price.
• In the end, the bot swapped all 182.8662 WETH received in both the front piece and the centerpiece transactions for 483,301.2534 USDT, resulting in a revenue of 59.1982 USDT.
• You may have noticed that the bot swapped 5856.673 USDT for 2.2375 WETH. We have no proof that this exchange is related to the sandwich. However, according to Sorella Labs, this could be part of a CEX-DEX arbitrage, indicating Jared’s more advanced trading strategies.

The above example is only the tip of the iceberg. Jared 2.0 would use adding liquidity transactions as the front piece and/or the centerpiece and removing liquidity transactions as the back piece. The combination can be various, putting several transactions in between, becoming sandwich attack victims.

The following image illustrates a 7-layer sandwich following a similar pattern, only having more victims.

The next image appears to follow the same pattern as the previous one. However, the 3 attack transactions are different beasts.

The front piece adds liquidity to the Uniswap V3 pool for USDT/WETH.

The centerpiece adds and removes liquidity in the same pool.

The back piece removes liquidity from the pool.

Jared’s new tricks disrupt our PnL calculation of sandwiches, and we are working on revision. Meanwhile, please check out our latest dashboard on builder rewards analyses.

• Builder Performance Analysis
• Builder Rewards Analysis by Bot

Want to learn more about Jared 1.0? Visit our Head First of DeFi to decode the DNA of DeFi Transactions & Strategies.

Follow us via these to dig more hidden wisdom of DeFi:

EigenTx | Website | Twitter | YouTube | Substack | Medium | Telegram

During Black Monday, the biggest winner among builders is beaverbuild, as shown in our last post. But you would not guess who ranked the 2nd regarding builder rewards. It’s neither Titan nor Rsync; instead, it is the builder labeled MEV Builder 0x3b, which took 1,448 ETH, worth $3.5M.

How did it make this much during the turmoil of the market?

The craziest liquidation sent 358.7 ETH, worth $802K, to MEV Builder 0x3B in Block 20459000. Although it appears only to generate $87.8 profit, that’s not the whole story.

Before the aforementioned TX, one liquidation sent 46 ETH, and after the biggest liquidation, one arbitrage gave 36 ETH to MEV Builder 0x3b.

The 2nd highest builder payout for MEV Builder 0x3B: 140 ETH, worth $325K, happened in this liquidation in Block 20459017.

In Block 20459061, there are two liquidations closely linked together, tipping Builder 0x3b 65 & 38 ETH.

Tx 1 on Pos 20 tipped MEV Builder 0x3b 65 ETH, worth $150K.

Tx 2 on Pos 21 tipped MEV Builder 0x3b 38 ETH, worth $89K.

You can find the other MEVs with tips over 10 ETH here: https://bit.ly/3WRkC10. It’s easier to find these using EigenTx’s Related TX feature to dive deep into the rabbit hole without wasting too much time with EigenTx’s TX spectacular indexing capabilities.

When checking all TX lists above, you can see all these crazy MEVs came from the same bot: 0x64545160d28fd0e309277c02d6d73b3923cc4bfa, which contributes all the miner tips to the MEV Builder 0x3b.

On http://EigenPhi.io, you can see 2 pages about the bot:

• The bot as liquidator with 7D revenue: $2.7M.

• The bot as arbitrageur with 7D revenue: $707.6K.

We have built a query on Dune to help you understand more about MEV Builder 0x3b. Remember to research other builders on our Builder Performance Analysis Dashboard.

Want to learn more about the DeFi Lego? Visit our Head First of DeFi to decode the DNA of DeFi Transactions & Strategies.

Follow us via these to dig more hidden wisdom of DeFi:

EigenTx | Website | Discord | Twitter | YouTube | Substack | Medium | Telegram

August 5th, the BLACK MONDAY of crypto. Degens were trying to escape the crash by sending their orders via all channels possible left and right, with high priority fees. Searchers and liquidators were reaping huge revenues during this rare scenario far and wide using arbitrages and liquidations with high builder tips for block builders.

Among all the builders, who reigned supreme?

Besides these spectacular times, we also need answers to questions like:

• What’s the real deal with builders’ private order flow shares?
• Who’s cashing in the most from private order flows?
• Can smaller builders break BeaverBuild and Titan’s market stranglehold?

Our latest Builder Performance Analysis Dashboard on Dune reveals the top contender, this ferocious beast, pocketing a fierce 3.4K ETH, worth $8.2M, in builder rewards.

Eager as a Beaver: Dam-Good Performance Floods the Market

From Aug 3rd to 5th, @beaverbuild raked in 3.9K ETH, a whopping 47% of its July haul in just three days. The beast’s income is more than that of @rsyncbuilder and @titanbuilderxyz, adding as 2.6K ETH.

@beaverbuild’s market share in public transactions and private order flow has been monopolized in the last three days.

• Public: 52.2%, 490K in transaction number.
• Private: 53.8%, 1.2M in transaction number.
• Overall, it was 52.7%, or 1.68M in transaction number.

Packing these transactions into blocks, the beast took 52.7% of all.

Among all the 3.9K ETH won by beaverbuild, 2.8K came from miner tips, and 1.1K was given as priority fees.

The biggest EOA paying priority fees belongs to Jaredfromsubway.eth, who paid 432 ETH to get @beaverbuild to pack all the sandwiches.

For example, Jared was willing to share 10 ETH, $25.8K, with beaverbuild to get this sandwich attack on-chain, while Jared only took $473.

Who transferred the most miner tips? It’s SCP, the HFT firm on the same bank as beaverbuild. The contract sent 1.14K ETH to the beaver from the 3rd to the 5th.

You can find all this builder performance data in our cutting-edge Builder Performance Analysis Dashboard, answering questions in the beginning.

The Place for All Your Builder Income Inquiries

All the charts in the dashboard cover data since 2023.9.1. till now.

The dashboard comprises two sections: general market status and single builder performance.

The Concerning Macro View

The picture below gives you a holistic view of the current builder market regarding Private Transactions vs. Public ones before Black Monday.

Let’s look at the overall percentages.

Here are 3 key findings.

BeaverBuild’s Consistent Dominance:

1. Private Transactions: BeaverBuild dominates with 43.9% of private transactions.
2. Public Transactions: BeaverBuild also leads in public transactions with 36.9%.

Market Share Distribution:

1. Private Transactions: The top three builders (BeaverBuild, Titan, and Rsync) collectively handle over 90% of private transactions. Titan: 29.2%; Rsync: 17.7%.
2. Public Transactions: These three builders also have significant shares but with slightly different proportions. Rsync: 25.9%; Titan: 20.3%.
3. Titan obviously takes a better position on private Order Flow than Rsync.

Role of Other Builders:

1. Private Transactions: Other builders, including Flashbots and builder0x69, have much smaller shares, indicating a high concentration at the top.
2. Public Transactions: The distribution is more varied among other builders, suggesting more competition and diversity in the public transaction market compared to the private transaction market.

The charts below illustrate the private transaction market in time series.

There’s a clear upward trend in the total volume of private transactions from August 2023 to July 2024, with the total height of the stacked bars increasing significantly over time. However, there’s a dramatic increase in transaction volume, particularly visible in the top chart. This spike is primarily driven by a sudden surge by Beaverbuild(light purple) and Titan(yellow). The volume nearly doubled compared to the previous month and subsequent months.

After the March 2024 spike, the volume seems to return to its previous growth trend, with Beaverbuild reducing back to its typical proportion. However, the overall volume remains higher than before the spike, suggesting a possible new baseline after this event.

What about the public transaction market?

Seasonal Peaks and Troughs: The volume of public transactions shows fluctuations over time, with notable peaks around February and April 2024. This indicates periods of increased activity, possibly driven by market events or network upgrades.

Rysnc, jetbldr, flashbots, and f1b are examples of builders being cornered by the superiority of Beaverbuild and Titan.

We can also observe the same trends from the charts demonstrating Total Transactions and Total Blocks.

The centralization of the builder market is alarming, manifesting the Matthew Effect getting stronger.

You can change the starting block number, time period of charts, starting time, and end time of the data range to discover the market further.

Dig Into a Single Builder’s Productivity

In the first part of this post, we’ve shown you the beaver’s performance, which can be found in the 2nd section of the dashboard. You can select which builder you’d like to explore.

For example, the image below examines the performance of Titan during the three days period mentioned above.

To discover more about the builder you are interested in, visit our Builder Performance Analysis Dashboard.

And stay tuned for more secret winners of the dark dark Black Monday.

Want to learn more about the DeFi lego? Visit our Head First of DeFi to decode the DNA of DeFi Transactions & Strategies.

Follow us via these to dig more hidden wisdom of DeFi:

EigenTx | Website | Discord | Twitter | YouTube | Substack | Medium | Telegram