Flashbots is a research and development organization formed to mitigate the negative externalities posed by Maximal Extractable Value (MEV) to stateful blockchains, starting with Ethereum.
I. Our Work
Our primary focus is to enable a permissionless, transparent, and sustainable ecosystem for MEV, via a three-pronged approach:
- Illuminate: bringing transparency to MEV activity.
- Democratize: democratizing access to MEV revenue.
- Distribute: enabling sustainable distribution of MEV revenue.
II. Our Dual Engines
Product & research are the semi-autonomous dual engines that propel our organization forward:
- Flashbots Product builds core infrastructure and ecosystem tooling that redefine the block production supply chain across blockchains.
- Flashbots Research explores MEV market dynamics and blockchain design challenges at the intersection of economics, security, and cryptography.
A. Flashbots Product
Our approach to product development is long-term oriented and research-informed while at the same time iterative and market-driven. These are the products and infrastructure we currently publicly maintain:
- Flashbots Auction: a marketplace for transaction ordering including the Flashbots Relay and MEV-Geth.
- MEV-Boost: an out-of-protocol implementation of proposer-builder separation (PBS) for proof-of-stake Ethereum.
- Flashbots Protect: an rpc endpoint that anyone can use for protection from frontrunning and failed transactions.
- Flashbots Data: tools and dashboards to improve the transparency of MEV activity on Ethereum and the Flashbots Auction.
B. Flashbots Research
In the past, our work defined and defied the existential crisis of MEV. Today, we are a research hub dedicated to tackling and uncovering questions relevant to the short, medium and long-term future of the MEV ecosystem. We have identified 10 research priorities:
MEV on ETH2
MEV in L2
Flashbots as critical infrastructure
Our research process consists of in-house research and the Flashbots Research Proposals (FRPs). The FRP process is an open and collaborative research process modeled upon the Ethereum Improvement Proposal (EIP), funded with our MEV Fellowship Grants.
- Research Writings: collections of blog posts and papers published by Flashbots researchers.
- Ongoing FRPs: research collaboration with community research contributors.
In the long run, we aim to build a sustainable research organization, where ambitious researchers can focus on the most interesting research problems, unencumbered by the friction of academia and the shackles of the industries.
III. Our Journey
A. The MEV Dystopia
Public blockchains offer a simple, but profound promise: a decentralized system of finance open to anyone, anywhere. Yet, we are far from realizing crypto’s bold future and face challenges every day that threaten to undermine this delicate experiment in decentralization.
Maximal extractable value (MEV) is a measure devised to study consensus security by modeling the profit a miner (or validator, sequencer, or other privileged protocol actor) can make through their ability to arbitrarily include, exclude, or re-order transactions from the blocks they produce.
Super linear return from MEV extraction results in significant economy of scale in block construction, creating incentives for centralization. Block producers who integrate with trading firms can get an inherent advantage in building the best blocks. The endgame in which a few large players making all the blocks - is an “MEV dystopia” that had to be prevented at all costs.
B. The Flashbots Research Collective
Flashbots was born out of the existential crisis of MEV, on Ethereum. In 2020, a group of concerned blockchain researchers, builders and whitehats converged on a journey to mitigate the negative externalities posed by MEV to stateful blockchains, starting with Ethereum.
We built open-source software that quantifies MEV and began exploring MEV’s frontiers within and across blockchains through open research initiatives, and ecosystem grants.
We uphold our commitment to public and open research, with the community, for the ecosystem. We steward the direction of community research via hosting open research discussions such as the MEV Roast series, and curate conferences such as MEV.wtf, Reorg.wtf, MEV.day and MEV-sbc.
We periodically release research posts that dive into the open questions of MEV and published research papers that pioneered an early exploration of cross-domain MEV.
C. The Flashbots Auction on Ethereum
The evolution of Flashbots auction has been an iterative journey towards gradual separation of duties and specialization of roles within the MEV supply chain.
- On Nov 23, 2020, we published the initial architecture and open-sourced MEV-geth for Ethereum, enabling miners to include strictly profitable transaction bundles in their blocks, thereby outsource block construction to MEV searchers via an off-chain, sealed-bid auction.
- On Jan 6, 2021, we released Flashbots Alpha, which introduces the Flashbots Relay as a transaction bundle propagation service that receives bundles from MEV searchers and forwards them to miners in order to democratize MEV.
By April 2021, mining pools accounting for more than 84% of the Ethereum network hashrate adopted MEV-geth, and sourced their MEV transaction bundles from the Flashbots relay, empowering anyone to be, effectively negating incentives for vertical integration between searchers and trading firms.
- On May 24, 2021, we released MEV-geth v0.2, introducing bundle merging, enabling miners to include multiple bundles per block.
- On Sep 27, 2021, we released MEV-geth v0.4 introducing megabundles. These are bundles that are merged by the Flashbots relay before being sent to miners, thereby enabling further specialization.
- In October 2021, we released Flashbots Protect, an RPC endpoint that anyone can use to protect their transactions from frontrunning and reverts using the Flashbots Auction.
MEV-Boost allows Ethereum consensus layer clients to source blocks from a competitive builder marketplace. This effectively achieves out-of-protocol Proposer-builder separation (PBS) as an interim solution whilst in-protocol PBS is developed over the coming years. It requires higher trust assumptions than in-protocol PBS, but does not require any modification to the base protocol.
Democratizing access to MEV by allowing solo validators to participate on equal footing as sophisticated staking providers is essential to ensure a decentralized validator set on Ethereum. MEV-Boost was designed from the ground up with Ethereum security as the primary objective and is compatible with any Ethereum client. This is a major upgrade to the Flashbots builder of proof-of-work Ethereum which required all participating miners to run MEV-Geth. By using the standard
builder specs, we ensure that client diversity is maintained and Nodes will fall back to local block production if a fault occurs in the MEV-Boost software.
- In November 2021, we published MEV-Boost: merge-ready Flashbots architecture for proof-of-stake Ethereum, and open-sourced the MEV-Boost implementation.
- On August 17, 2022, in order to foster healthy, global relay competition ahead of the Merge, we open-sourced the MEV-Boost Relay under AGPL, an aggressive copy-left license that requires derivatives to be developed in the open.
- On September 15, 2022, 17 epochs after the Merge, MEV-Boost was activated.
- On November 9th, 2022 MEV-Boost v1.4.0 was released. The release introduced the ability for proposers to specify a minimum bid value to help increase Ethereum’s censorship resistance by foregoing a small amount of profit. The implications of this feature are expanded upon in The Cost of Resilience.
- On November 18, 2022, we open sourced our leading block builder in order to promote competition and help the ecosystem grow further.
On November 23 2022, exactly two years after Flashbots: Frontrunning the MEV crisis was published, we updated our public commitment in a sequel to the original post; The Future of MEV is SUAVE. SUAVE is the start of a new cooperative phase of MEV which aims to decentralize the block builder role and combat the centralizing forces of exclusive order flow. It is an Ethereum native, MEV-aware and privacy-first encrypted mempool which protects against the entrenchment of any actor and eliminates any central points of control, including Flashbots.
By sharing the same sequencing layer, SUAVE allows block builders to capture cross-domain MEV, ensure maximum revenue for validators, and the best execution for users, while reducing the economic centralization pressure of MEV on each domain.
SUAVE will be progressively decentralized with improved trust guarantees and increased expressiveness over time. It will be developed in the open and we invite all interested parties to work with us!
IV. Join Us
On the mission to democratize MEV, our collective is always on the lookout for founder level talent and experts in MEV to join us.
Please apply through our jobs page or reach out directly at firstname.lastname@example.org with more information on why you would like to join our team.
V. Other Links
Github - Documentation - Status Calendar - Transparency reports Discord - Youtube