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MEV & Block Building

Maximal Extractable Value is the most important and least intuitive feature of post-Merge Ethereum. Every 12 seconds, a block proposer (validator) selects which transactions to include, in what order, and — through MEV-Boost — delegates block construction to specialized builders who compete in an auction for the right to build the block. This market processes billions of dollars in value annually, and its structure determines who captures the profits from arbitrage, liquidation, and transaction ordering.

MEV arises from a simple fact: the block proposer has unilateral authority over transaction ordering within their block. If a pending transaction on Uniswap would move the price, a searcher can place a buy just before it (front-run) and a sell just after (back-run), capturing the price difference — a sandwich attack. If a lending position is undercollateralized, a searcher can liquidate it for a bonus before anyone else. If the same asset trades at different prices on two venues, a searcher can arbitrage the difference atomically.

Before PBS, searchers competed for inclusion via Priority Gas Auctions — bidding wars that burned most of the available MEV in gas fees and congested the network. PBS replaced this with a sealed-bid auction where builders construct blocks, relays intermediate the bids and blocks, and validators select the highest bid. The builder market is concentrated among a handful of specialized firms running sophisticated transaction-ordering algorithms. Relays are the trust bottleneck — they hold block contents blind until the proposer commits, preventing proposers from unbundling MEV-rich blocks.

This section covers the MEV supply chain from mempool to block. We track builder revenue and proposer payments through MEV-Boost relay data, analyze the economics of order flow markets and the shift toward private transaction submission, and examine the structural risks of builder and relay centralization.

Research Areas​

  • MEV-Boost & PBS — Builder market structure, relay economics, proposer revenue tracking. How the proto-PBS auction allocates block construction rights.
  • Searcher Strategies — Sandwich attacks, atomic arbitrage, cross-chain MEV, CEX-DEX arbitrage. How searchers identify and capture MEV opportunities.
  • Order Flow Markets — Payment for Order Flow (PFOF), Order Flow Auctions (OFA), private mempools. Who gets to see your transaction before it lands on-chain, and at what price?
  • Centralization Risks — Builder concentration, relay trust assumptions, censorship resistance. Is the MEV supply chain trending toward a monopoly?
  • Protocol Responses — Preconfirmations, based sequencing, enshrined PBS. How Ethereum's roadmap addresses MEV at the protocol level.

All MEV & Block Building Articles​