Monopoly in Ethereum Block Building

The Ethereum block-building market is currently highly concentrated. According to the data from March 22, 2025, Beaverbuild and Titan Builder collectively produced approximately 86% of Ethereum mainnet blocks over a two-week period, forming a de facto duopoly.

Just two entities control over 80% of block-building power (Source: MEV-Boost)

Further data from the MEV-Boost Dashboard shows the market shares (percentage) of the top five builders as follows:

1. Titan Builder: 44.46%
2. Beaverbuild: 42.53%
3. Rsync: 9.98%
4. Builder+ btcs.com: 1.88%
5. BuilderNet: 1.18%

By squaring each market share percentage and summing them up, we obtain the Herfindahl-Hirschman Index (HHI):

HHI ≈ 44.46² + 42.53² + 9.98² + 1.88² + 1.18² ≈ 3,891.91

According to the U.S. Department of Justice standards, an HHI exceeding 1,800 indicates a highly concentrated market. Thus, this data reveals a monopolistic phenomenon in Ethereum’s block-building market (HHI ≈ 3,892), raising concerns about competition dynamics and centralization risks: a few builders controlling most of the transaction-ordering power may undermine blockchain fairness and decentralization principles.

However, Ethereum employs a Proposer-Builder Separation (PBS) design, dividing the tasks of “building blocks” and “confirming blocks” among different parties. Validators stake ETH to gain the right to select the most profitable block from those submitted by builders for confirmation and inclusion in the chain. Builders specialize in bundling transactions into blocks and typically prioritize transactions that yield higher profits (i.e., Maximum Extractable Value). This ensures that validators do not build blocks themselves and cannot unilaterally control transaction content, meaning that network fairness and decentralization may not necessarily be compromised even with high block-building concentration.

Nevertheless, Titan and Beaverbuild (and their affiliated builders) have reshaped Ethereum’s block-building competitive landscape, squeezing out smaller builders.

Builders’ Profit Models

MEV was initially studied by the Flashbots team and refers to the maximum profit achievable through transaction ordering, addition, or removal on the blockchain. When you send a transaction on Ethereum, validators and builders have the authority to determine its order, and specific sequences can create additional profit opportunities (e.g., arbitrage trading, front-running). These extra profits derived from specific transaction orders or methods are called MEV.

Flashbots provides open-source MEV-Boost software, enabling validators to obtain blocks from third-party builders and increase validator profits. However, Flashbots focuses more on ecosystem infrastructure and fair MEV distribution, hardly profiting from it. To maintain influence, it relies on collaborations with the Ethereum community and client teams (e.g., promoting PBS).

In contrast, the monopolist Titan has adopted a highly commercialized profit model: securing exclusive trading partnerships with front-end applications to capture excess MEV profits. For example, Titan signed an exclusive order flow agreement with the well-known trading bot Banana Gun, granting it exclusive rights to bundle transactions from the app.

Through such strategic collaborations, Titan gains access to higher-profit private transaction flows, assembling blocks with greater profitability than competitors. Titan maintains its market dominance precisely through this “private order flow + MEV extraction” model, monopolizing high-value transaction sources by deeply integrating with key trading front-ends.

Titan and Banana Gun’s Exclusive Agreement

In April 2023, Titan and Banana Gun entered into an exclusive order flow agreement, marking a pivotal moment in Ethereum’s block-building market centralization. Under the agreement, Banana Gun privately provides nearly all its users’ transaction orders to Titan for block bundling in exchange for profit-sharing or other benefits. This means Banana Gun’s private order flow is monopolized by Titan, reducing competition in the public transaction pool and preventing other builders from bidding.

With the exclusive order flow advantage, Titan can assemble blocks with higher MEV profits, frequently winning MEV auctions and rapidly increasing its market share from less than 1% to over 40%. This exemplifies the Matthew Effect: builders with private flows grow stronger, while those without struggle to compete, further exacerbating market concentration.

From a profitability perspective, [3] Titan’s profit margin under the exclusive agreement is as high as 17.75%, far exceeding Beaverbuild’s 9%, while Flashbots barely profits from it. Additionally, over 2,271 ETH from Banana Gun users’ tips ultimately became Titan’s net profit, highlighting the significant boost exclusive order flow agreements provide to Titan’s earnings.

Titan’s market share (orange) surged after April 2023 (source: MEV-Boost)

While such agreements may improve transaction success rates and speeds to some extent, they also carry risks. If parties prioritize their own interests, issues like transaction queue-jumping or unfair MEV profit distribution may arise, ultimately harming users. Moreover, these exclusive collaborations have drawn widespread attention to market monopolies and potential conflicts of interest.

Applications and Development of Chain Abstraction Technology

In response to market centralization and potential conflicts of interest, a new technological concept has emerged in the Ethereum ecosystem: chain abstraction. This technology hides the complexity of underlying multi-chain environments from users and developers, offering a consistent and simplified blockchain experience. Through chain abstraction, end-users no longer need to worry about which chain executes transactions, which gas fee currency to use, or other technical details, as if the entire multi-chain ecosystem were a unified platform. This brings multiple benefits:

Simplifying User Experience

In the past, using blockchain often required manually switching networks, such as moving from Ethereum to another chain, with cumbersome steps for asset transfers. Chain abstraction technology now streamlines these processes.

For example, Omni Network introduced a toolkit (SDK) for developers to integrate cross-chain functionality directly into their applications. Users can seamlessly transfer assets from Chain A to Chain B within the same DApp, eliminating the need to switch wallet networks manually or frequently use cross-chain bridges.

This frictionless experience allows novice users to interact with blockchain applications as effortlessly as traditional internet services, potentially increasing adoption and retention rates.

Lowering Technical Barriers

Chain abstraction benefits users and reduces hassle for developers. Previously, supporting multiple blockchains required writing separate code for each chain, which was repetitive and time-consuming. With chain abstraction, developers can handle all chains through a unified platform interface.

For instance, by providing a single cross-chain smart contract environment, developers can design a DApp once and deploy it across multiple blockchains without additional modifications or maintenance. This significantly lowers development costs and allows teams to focus on innovation and feature optimization rather than cross-chain technicalities.

Encouraging Broader Participation and Innovation

As blockchain becomes more accessible, it attracts non-technical users, fostering new applications and richer use cases.

Chain abstraction also enables seamless communication and collaboration between blockchains. Previously, assets were often confined to a single chain, but now, through chain abstraction, users’ assets and funds can move freely across multiple chains and be utilized more efficiently.

For example, decentralized finance (DeFi) liquidity, once concentrated on one chain, can now be pooled across multiple chains; NFTs or GameFi games can leverage cross-chain technology to share user bases and resources, creating new gameplay and business opportunities.

Thus, chain abstraction enhances blockchain scalability and encourages more users to explore blockchain services, unlocking new growth opportunities for the ecosystem.

Omni Network’s EVM and Interoperability Model

Omni Network is a new blockchain platform implementing the “chain abstraction” concept. As an emerging L1 blockchain, its primary goal is to address communication inefficiencies between Ethereum’s Layer 2 solutions (Rollups). Omni Network offers two key tools to achieve this:

Universal EVM Environment

Omni aims to integrate multiple rollups into a unified platform. Its EVM environment allows developers to build applications that operate across rollups using familiar Ethereum smart contract programming, eliminating the need to rewrite or upgrade contracts for each rollup.

The EVM environment (Ethereum Virtual Machine) can be considered a “virtual computer” on the blockchain. All smart contracts (small programs in decentralized applications) run on this virtual machine.

Developers write contracts in Ethereum’s programming language (e.g., Solidity), which are then executed in the EVM. Since every Ethereum node includes an EVM, the same contract yields identical results across all nodes.

In short, the EVM environment is a blockchain-specific “runtime space” where smart contracts run consistently everywhere. Omni Network leverages this environment to simplify cross-chain application development.

Omni enables developers to build cross-chain applications using familiar methods (source: Omni Network)

Cross-Chain Interoperability Protocol (Interop)

Omni Network’s cross-chain interoperability protocol (Interop) allows different blockchains to securely and easily transfer assets and information, no longer constrained by a single chain.

Specifically, when a user wants to transfer assets from one blockchain (source chain) to another (target chain), Omni employs “Solvers” to prepare the assets on the target chain in advance. Users can immediately use these assets without waiting for the source chain’s transfer process.

Simultaneously, Omni uses secure “custody contracts” and “cross-chain message proofs” to ensure assets on the source chain are locked before being released on the target chain. This “target-chain-first” approach creates a seamless experience, making asset transfers feel instantaneous.

Solver workflow (source: Omni Developers)

In summary, chain abstraction provides a technical means to integrate fragmented resources and liquidity in a multi-chain environment, mitigating the impact of centralization on any single chain.

Market Centralization Challenges to Decentralization Ideals

The centralization of Ethereum’s block-building market undoubtedly challenges blockchain’s core decentralization principles. Blockchain’s trustworthiness largely stems from distributed power and control. However, when most blocks are generated by a few builders, potential risks cannot be ignored: these builders may prioritize their own interests in transaction ordering (e.g., favoring their orders or reorganizing sequences), deviating from blockchain’s fair and neutral principles.

In extreme cases, monopolists could even collude to censor specific users’ transactions, undermining Ethereum’s censorship resistance. While the PBS mechanism limits builders’ direct control, new issues emerge as vertical integration methods like private order flows gain traction.

Solutions to these challenges include:

Deepening PBS Mechanisms and Open Auctions

[2] Ethereum may introduce PBS through consensus-layer upgrades, ensuring builder roles are transparent and replaceable to reduce monopolistic manipulation.

Simultaneously, encouraging wallets and DApps to adopt open order flow auctions instead of exclusive sales allows all builders to bid fairly for transaction bundling rights.

Promoting Decentralized Builder Networks

Flashbots and others are developing solutions like BuilderNet, aiming to dismantle monopolies. BuilderNet enables multiple independent participants to co-run a block builder and share profits based on contribution value. This eliminates the need for exclusive collaborations by allowing any application to privately submit order flows and earn rewards. By protecting privacy in trusted computing environments, BuilderNet fosters fair competition, curbing monopolistic MEV extraction practices.

Expanding Multi-Chain Ecosystems and Chain Abstraction

The rise of chain abstraction inherently counteracts single-chain monopolies. As cross-chain infrastructure like Omni matures, users and applications can operate flexibly across chains. If Ethereum’s builder monopoly worsens, developers and users may migrate to L2 or other chains, using chain abstraction to maintain a consistent experience. This serves as a check: Monopolists are making the mainnet unfriendly and risk driving traffic elsewhere. Thus, multi-chain adoption and interoperability are strategies to preserve decentralization and ecosystem health.

Community Oversight and Policy Guidance

Decentralized communities can strengthen oversight by monitoring builder market shares and transparency, advocating against excessive monopolies. Governance mechanisms may also introduce antitrust measures, such as behavioral guidelines for MEV-Boost builders or incentives for new entrants. In extreme cases, industry self-regulation or regulatory recommendations could limit harmful agreements.

Introduction of SUAVE Technology

Additionally, SUAVE (Single Unifying Auctions for Value Expression) technology is noteworthy. [4] SUAVE is seen as a future direction for MEV extraction, aiming to unify auction processes and reduce market volatility and unfairness caused by fragmented competition.

In traditional MEV-Boost auctions, builders submit orders separately, enabling private order flows and exclusive agreements to create unfair advantages. SUAVE consolidates order flows onto a single platform, ensuring all participants compete under the same rules and accurately reflecting order flow value. This unified mechanism improves auction efficiency, reduces delays and errors from information asymmetry, and enhances transparency for regulators and communities to track ecosystem competition.

Conclusion

Ethereum’s block-building market is highly concentrated, with a few builders controlling most transaction-ordering power. This reminds us that even with technical designs like Proposer-Builder Separation, architecture alone cannot fully address centralization. Achieving true decentralization requires integrating technology, economic incentives, and governance mechanisms.

On the other hand, emerging “chain abstraction” technologies and more transparent auction mechanisms show promise in changing the status quo. Tools like Omni Network simplify cross-chain interactions for users and developers, while BuilderNet and SUAVE promote fair participation in block-building through open auctions. Moving forward, metrics like HHI should continue to monitor market concentration, providing actionable insights for protocol designers and policymakers to steer blockchain ecosystems toward genuine decentralization and open competition.