Blocknative Wrapped: 2022 Block Building Year-End Wrap-Up

TL;DR: infrastructure matters. Always be optimizing.

On September 15 at 06:42:42 UTC, The Merge introduced block builders as a new category of economic actors that provide core Ethereum capabilities and added additional steps to the web3 transaction lifecycle. To date, the Blocknative relay and builders have contributed more than 21,000 blocks to Ethereum’s mainnet, making Blocknative among the most prolific block builders. Our relay has been rapidly adopted by major staking pool operators and is now accepted by more than 258,000 registered validators or over 60% of the global network.

We have learned a lot in the three months since The Merge. This has enabled us to make continuous infrastructure improvements, resulting in increased win rates and profits for our connected validators and MEV searchers. Read our full breakdown below to see what we’ve done, what we’ve learned, and what we’re looking forward to in 2023.

Launching an open-source relay

What we did: 

• Built our relay from scratch and open-sourced the codebase from the start
• Continuously improved infrastructure with performance, resilience, and always-on availability in mind

What we learned:

• Relays are reasonably expensive to operate and maintain despite currently offering limited direct economic incentives
• A large number of validator operators rely on a small number of relay operators for live troubleshooting 

In 2023 we are excited to see increased relay code diversity as more relays enter the MEV-Boost space. We believe the ecosystem needs to explore the economic incentives for relay operators. 

Trust remains an important topic that we will continue to discuss with the community on how to improve. There are a lot of infrastructure updates in the pipeline and we are excited to continue to create and contribute to diffrent proposals in the ecosystem in the new year.

Always be optimizing

What we did:

• Working with the validator, relay, and searcher community to optimize infrastructure affecting all relays
• https://github.com/flashbots/mev-boost/issues/428 
• https://github.com/ethereum/builder-specs/issues/59 
• https://github.com/flashbots/builder/issues/7 
• https://github.com/flashbots/boost-geth-builder/issues/25 
• https://collective.flashbots.net/t/ideas-for-incentivizing-relays/586 
• Detailed dashboards and alert systems are in place to monitor our relay and block builders
• Improved processing speed during validator registration congestion at the edge of epochs
• Reduced geographic latency 
• Introduced validator registration caching 
• Heavily optimized many endpoints for builder and proposer APIs

What we learned:

• Every optimization has resulted in an increase in our block win rate
• The community is an invaluable resource for ideas, feedback, and frontline visibility
• Decentralized teams allow 24/7 monitoring & quick triaging

In 2023 we are excited to continue discussions around PBS, MEV, and the infrastructure that enables block builders, searchers, and validators to communicate. We are excited to continue researching, investigating, and working with the community on solutions that benefit the entire Ethereum Ecosystem. Currently, we have asynch sig verification for making running a relay more accessible as an open topic of discussion in the Ethereum Builder community on GitHub.

Adding MEV bundle support to our blocks 

What we did:

• Launched our first block builder using only transactions from the public mempool 
• Launched our second block builder in November, implementing bundle support (alpha) for MEV searchers
• Will open permissionless bundle support for all searchers in 2023

What we learned:

• Infrastructure matters. With 4 years of experience operating low-latency, highly reliable infrastructure for Ethereum, we first optimized our builder and relay to ensure performant delivery of profitable blocks to validators via MEV-Boost.

• After battle testing in the public mempool, we did our alpha launch of MEV bundle support with a group of MEV searchers. The results have been extremely successful. Despite only including a limited number of bundles during alpha launch, the positive effects of our optimizations can already be seen in the increase in our number of blocks won (see chart below).
  
  

In the new year, we look forward to diving deep into developing ways the ecosystem can research and understand the impact of MEV in the post-merge Ethereum ecosystem. One of our goals is to start recirculating value derived from MEV (#ShareTheMEV) to the originators of the transactions. Adding Transaction Preview to Web3 Onboard was a big step toward this future. Image a world where your wallet or dapp pays you to use it through MEV gas rebates.

Maximize Block Rewards. Optimize MEV Strategies.

Searchers can use Blocknative’s suite of tools to search with an edge and securely get their MEV bundles on-chain (alpha). Our blocks generally make up ~10% of the network. Interested searchers can submit bundles via our RPC endpoint.

Validators can earn more by connecting MEV-Boost to the Blocknative Relay endpoint. Connect to our relay today to maximize your block rewards.

If you’re a dapp or wallet interested in #ShareTheMEV we would love to chat with you.

We encourage you to join our Discord community for direct access to Blocknative employees. You can also follow us on Twitter @Blocknative for the latest updates from our team.

Post-Merge Ethereum is offering web3 users a fascinating and uncharted experience. We look forward to continuing to work closely with the ecosystem toward the goals of decentralization, scalability, and fair access for all in the new year.