In January Flashbots released Flashbots Alpha v0.1, a proof of concept communication channel between miners and users that enables transparent and efficient MEV extraction.
Since then we've seen rapid adoption, and now over 30% of blocks on Ethereum are Flashblocks.
Flashbots has two types of direct users today: searchers & miners
Searchers are users who send transactions via Flashbots - today these are mostly bot operators extracting MEV
Miners are the block producers of Ethereum today, who want to extract MEV in a fair & transparent way
Miners who run MEV-Geth and receive Flashbots bundles make extra ETH for doing so.
In fact miners make about ~5% more revenue for each Flashbots blocks they mine, and in total miners have made ~$45m in profit from Flashbots.
Measured in ETH or USD daily miner profit has been going up over time, and yesterday was Flashbots' most profitable day. About ~800 ETH or ~$3m in miner profit.
Mining Flashbots blocks is profitable because searchers' transactions pay more than the transactions they displace.
The πͺ line is the gas price of searchers' transactions & the π¦ line is the gas price of txs at the tail end of blocks
The "tail gas price" txs are the least profitable for miners & are pushed out to make room for searchers' txs. Since πͺ > π¦ this is profitable to do!
We've seen strong adoption by searchers because Flashbots is great for them too. Searchers only pay for txs if they are successful & can send groups of txs bundled together to be executed atomically
These are super powers that open up many new MEV opportunities
Quantifying the # of searchers is hard because a searcher can use multiple signing keys in the relay, multiple EOAs, and multiple contracts on-chain. We're moving towards a reputation system based on signing keys, but for now we've listed three different searcher adoption metrics
Quantifying how much profit searchers have made is also hard (we're working on it), but we can easily see how much they've paid to miners
The top searcher contract has paid $7.1m to miners in total, and 11 searcher contracts have paid more than $1m.
If you're interested in learning more about Flashbots and what we've been up to check out the latest Flashbots transparency report here:
A brief thread on a novel MEV searching strategy, where we chase the trail of a mysterious bot backrunning private flow and reveal how they do it.
@blairmarshall pointed out a bot that appears to have private access to user orderflow that was landing bottom-of-the-block blocks on the Flashbots builder. That didn't make sense to me. We don't run backrunning bots! So we investigated.
MEV-Boost payments were at an alltime high yesterday, totaling 7691 ETH (!) which is nearly double the previous ATH of 3928 ETH during the FTX fiasco this fall.
A few statistics on MEV on Ethereum yesterday in this thread
You can't compare stats these 1:1, but the ATH for daily miner profit from mev-geth was 6397 ETH in June 2021. That's the *profit* of running mev-geth vs a vanilla mempool mining client.
A similar metric here would be the difference in payment for validators from running mev-boost or not. There's not a great up to date estimate of this out there I think
You could derive it by looking at the value of the mempool builder we submit (0xa1defa) and the winning block
Brutal & unfortunate. A bad aggregator led to a user getting rekt.
A reason that a competitive MEV market & orderflow auctions are deeply important is that cases like this could potentially be entirely mitigated. The user could be paid back the arb that their wreckage left.
The user's $2m ended up in a Uni v2 pool, which an MEV bot was quick to snatch up for basically nothing of course. They paid a premium to a miner for this $2m but it really wasn't anything (~20 ETH).
The MEV market was strangely uncompetitive in this case. 20 ETH paid to the builder for capturing $2m is an insanely good trade and you'd expect competition to push that 20 ETH much much closer to the value of $2m.
MEV-Share builds on MEV-Boost by further unbundling the transaction supply chain.
Whereas MEV-Boost enabled collaboration between validators and builders, MEV-Share does the same for searchers and users - empowering users to be paid for their transactions.
With privacy users can bargain for the MEV they create without permissioning searchers. But, programmable privacy allows users to selectively share information to enable optimization and collaboration.