Author: Austin King, Co-founder and CEO of Omni Network
Compiled by: Felix, PANews
Few people know that just 2 companies create 90% of Ethereum blocks. However, even fewer know the backstory that led to this monopoly.
Here is the little-known story of Titan, over $40 million in hidden profits, and how chain abstraction will bring greater opportunities.
The Beginning
It all began at the end of 2022 when Flashbots created MEV-Boost, a software that allowed Ethereum L1 validators to obtain transaction blocks from third parties (known as Builders, who specialize in MEV extraction), enabling validators to earn more money. After this, almost all Ethereum L1 validators rapidly began running this software:
As shown in the figure below, initially (#1) Flashbots (pink) was the only operating 'Builder', and fierce competition emerged six months later (#2). Now, there are only 2 significant builders (#3): Beaver and Titan.
Clearly, a lot happened during this period, but one of the most influential events was in April 2023, when Titan reached an Exclusive Order Flow (EOF) agreement with Banana Gun—Banana Gun later became a top Telegram trading bot. After this EOF deal, Titan had the chance to build more profitable blocks for L1 validators than any other builder, as they had exclusive access to transactions that offered higher rewards.
After this, over 90% of Ethereum L1 transactions came from two companies (Beaver and Titan).
Interestingly, here are the profit statistics as of August this year:
Flashbots
Created approximately 550,000 blocks
Profit 16.7 ETH
Titan
Created approximately 600,000 blocks
Profit 13,151 ETH
At today's prices, the difference is $44 million.
Although all of this data is public, some interesting questions remain a mystery:
Why did Banana Gun choose to route almost all of its bundled services to Titan when it held less than 1% of the market share?
Did Titan initially strike a multi-million dollar deal with the Banana Gun team to boost market share?
Did Titan promise to provide kickbacks to the Banana Gun team, thereby harming its users' interests?
The specifics are unknown, and perhaps few people are aware of this information.
As the co-founder and CEO of Omni Network, why would Austin King take the time to deeply consider such deals?
Because chain abstraction will unlock greater profit opportunities. The current market is rapidly shifting towards focusing on the crypto user experience (users will not consider Gas, transaction submission, which chain to transact on, etc.), and the next wave of users will be far less 'complex' than today's crypto users. New users will not care how all this happens, and this downstream abstraction will create more such opportunities, allowing networks to generate significant revenue streams.
Today, the 2 core primitives of OMNI (EVM + Interop) are destroyed when used. However, few understand that the revenue opportunities from the order flow supply chain directly introduce business opportunities into the core model of the token.
