1/14 πŸ€‘ $32.5M, that's searchers' revenue of #MEV on #Ethereum in Jan and Feb of 2023. In the same MEV supply chain, builders' income reached $67.21M, out of which validators took the most: $62.58M. This research shows you how the value flows thru the whole stream.
2/14 πŸ“Š Here is the big picture illustrating the benefits flow for different parties, specifically builders and validators under the current PBS scheme. One liner: MEV Accounts for 51.6% of Builders' Revenue, and Validators Stand as Top Beneficiaries.
Let's dive deeper. πŸ•΅οΈβ€β™€οΈ Image
3/14 ⚑️During the 2 months, EigenPhi identified 975,290 txs involving MEV payments. Our algorithm classified 64% of these transactions as originating from three types of MEV, which generated a profit of $7.3 million collectively and contributed $18.9 million toward MEV payments. Image
4/14 πŸ’° The remaining 36% of txs, with undefined types, accounted for $15.8 million in MEV payments. These yet-to-be-strictly defined categories include Just-In-Time (JIT) transactions, statistical arbitrage, DEX-CEX arbitrages, and private orders, among others. Image
5/14 πŸ‘· Of these MEVs, $23.1 million is directly transferred to the builder's address through coinbase.transfer(), while the remaining $11.6 million is paid to the builder as priority fees. Image
6/14 πŸ’Έ MEV accounts for 51.6% of the builder's revenue, with the remaining 48.4% coming from priority fees paid by regular transactions. Image
7/14 🀯 Builder’s explicit revenue for first 2 months of 2023: only $4.4M. 93% of $67.3M was allocated to compensate validators, who received $62.6M. Image
8/14 πŸ’΅ Considering only the MEV part and assuming that the builder transfers all regular transaction fees to the validator, it remains essential to allocate 88% of MEV to validators to guarantee that the builder's block is successfully proposed. Image
9/14 Now you've got the bigger picture. And you might want to ask: who exactly are these builders and validators that have the biggest piece of the 🍰? Our 2nd part of the analysis has the answer: the oligarchs.
10/14 The market competition between builders and validators exhibits an apparent oligopoly effect, with @LidoFinance claiming a 30% market share, and the top three contenders, being builders and validators at the same time, securing about 50% of the total profits. Image
11/14 . Currently ranking first, @LidoFinance amassed $21M in profits in 2 months, claiming a 30% market share. Meanwhile, the runner-up, tagged as Coinbase by mevboost.pics, occupies 15% of the market share. Image
12/14 Lido's market share in terms of profits also aligns with its staking weight and the probability of proposing new blocks. @DuneAnalytics shows @LidoFinance has staked a total of 6,038,112 ETH with 189k validator nodes, accounting for 31.9%. dune.com/hildobby/eth2-… Image
13/14 Our data exhibit that Lido's share of proposing blocks on their own or obtaining auctioned blocks from Relay is around 30%. Assuming 1 ETH equals 2,000 USD, the block's transaction fees and MEV revenue generate approximately 1% annualized return for Lido.
14/14 That's it! Wanna to find out more about the gains of Searchers, Builders, and Validators, please visit: eigenphi.substack.com/p/value-alloca…
And would love to have inputs from Giga Brains: @christine_dkim, @drakefjustin, @0x94305, @uriklarman, @sui414, @ellen, @jon_charb, @bertcmiller

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More from @EigenPhi

May 10, 2023
1/10 πŸ„ Alert! πŸ„
Our research shows πŸ₯ͺ MEV’s impact on @CoWSwap is one magnitude lower than on any other DEX.
It’s time to Moo-ve your attention to this report and milk all the buttery details!πŸ₯›
drive.google.com/drive/u/1/fold…
2/10 In the report, 🧐 we cover revenueπŸ’°, frequency πŸ“Š, and volume of all the sandwich MEVs attacking @CoWSwap. On top of these, we also compare πŸ₯ͺ's impact on different aggregators, DEXs & protocols. And we list all the top CoW Swap solvers under attack and many juicy dataπŸ‘‡ Image
3/10 #Uniswap and @CoWSwap, which protocol is more resistant to πŸ₯ͺattacks? In terms of πŸ₯ͺ revenue for 2022, it's $0.13M from CoW Swap solvers. Compared to total fee revenue: $8.55M, sandwich attacks only accounted for 1.5%, one magnitude lower than #Uniswap. Image
Read 11 tweets
May 8, 2023
1/9 The Chickens Are Clucking, and the Cows Are Mooing With Delight! Why? Because these CoWs are much hard to become the recipe of sandwiches. Our research shows that πŸ₯ͺ MEV's impact on
#CoWSwap is One Magnitude Lower Than on Any Other DEX.docs.google.com/document/d/1lu…
2/9 πŸ₯ͺ frequency: in 2022, 1.9K πŸ₯ͺ attacked CoW Swap's 239K trades, meaning sandwich MEV only accounted for about 0.8% of all the transactions on CoW Swap. Image
3/9 πŸ₯ͺ revenue: Sandwich attacks extracted $0.13 million from CoW Swap solvers. Compared to CoW Swap's total fee revenue of $8.55 million, sandwich attacks only accounted for around 1.5%. Through CoW Swap, the % of attacks is one magnitude lower than #Uniswap. Image
Read 9 tweets
Apr 24, 2023
Discover Q1 2023's most astounding MEV windfalls at our event "Mastering MEV: Unraveling the DeFi Mystery of Latency and its Impact" at #Consensus2023! Follow us to learn how the USDC Depeg created incredible MEV opportunities πŸš€

🎟️ Claim your ticket: eventbrite.com/e/mev-past-fut…
According to our tracking data, the USDC depegging in Q1 2023 led to a massive MEV revenue peak. Arbitrage contributed $40M, sandwich MEV extracted $46M, and liquidation took $2M from the market. πŸ“ˆ
MEV searchers generated over $89M in Q1 revenue, but a large portion (78.9%) was paid by sandwich attackers to builders for successful front-run/back-run transactions. Arbitrageurs and liquidators paid over half of their revenue to builders and validators. πŸ’°
Read 5 tweets
Apr 1, 2023
This is an in-depth 🧡thread🧡 of the Euler Attack. We not only cover what happened during the attack, but also give our analysis on the beneficiaries and losers, whales affected, and addressed with net large flowsπŸ‘‡
Ethereum-based noncustodial lending protocol Euler Finance faced a flash loan attack on March 13. The attacker stole millions in $DAI, $USDC, $WETH, $stETH, and $wstETH.
The exploiters' addresses transferred $740.28 million to the Euler contract, while the Euler contract transferred $944.75 million to the exploiters' addresses. As a result, the exploiters gained $204.46 million from Euler Finance, aligning closely with third-party data.
Read 10 tweets
Mar 30, 2023
2022 is a memorable year for DeFi. Terra Luna, 3AC, Celsius, FTX... Despite all these downfalls, MEV still contributed $328B, half the total DEX volume of $666B on Ethereum. This wonderful Twitter Space reflects on the past year and looks to the future. eigenphi.substack.com/p/highlights-f… Image
All the insights below are from these fantastic guests:
⭐️ @christine_dkim, VP, Research at @galaxyhq
⭐️ @sui414, Danning, Lead Data Scientist at @0xProject
⭐️ @_bout3fiddy_, Core Contributor of @CurveFinance
⭐️ @_prestwich, James Prestwich, Founder/CTO of @nomadxyz_
⭐️… twitter.com/i/web/status/1…
πŸ‘‰Metrics
@christine_dkim: it may vary and rely more on analyzing smart contract activity and understanding how markets are moving. It's crucial to note that MEV is multifaceted, and one's interest may heavily depend on their focus.
Read 13 tweets
Mar 30, 2023
We were excited to work with @DefiLlama to protect traders with timely notifications and alerts to probable MEV attacks. Find out more in our "Weekly Highlights"
eigenphi.substack.com/p/weekly-highl…
Arbitrum $ARB Airdrop went LIVE on March 23rd with price volatility in the market. EigenPhi can make TX tracking easy by visualizing $ARB transactions with our EigenTX Chrome Extension(bit.ly/3RnUOUp).
On March 23rd, EigenPhi joined by MEV experts, had fruitful discussions on the topic of MEV in 2022. Questions were asked. Opinions were shared. Discover more and stay tuned for for the highlights Image
Read 4 tweets

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