Decentralization of Ethereum's Builder Market

Paper: NO_ITEM_DATA:yangDecentralizationEthereumBuilder2024

• In this paper, they study why nodes win the MEV-boost auctions.

We show the access barriers around private order flows constitute a significant entry barrier to the builder market. A new builder needs to pay up to 1.4 ETH to access this private order flow, a significant amount considering their low initial profits. By computing the true value of bids, we investigated the inequality in block-building capabilities among builders and the competitiveness and efficiency of the MEV-Boost auctions. We observed that top, middle, and tail builders have significantly varying capabilities in extracting MEV, and the inequality worsens when MEV increases. 88% of the MEV-Boost auctions we studied were competitive, yet uncompetitive auctions still resulted in a total loss of 221.09 ETH for the proposers, which is 0.98% of their total gain. Meanwhile, only about 79% of the MEV-Boost auctions were efficient, and over half of the inefficient auctions were caused by block subsidization.