Author: Austin King, Co-founder and CEO of Omni Network
Compiled by: Felix, PANews
Few people know that only two companies created 90% of Ethereum blocks. However, even fewer know the backstory that led to this monopoly.
Here is the unknown story of Titan, over $40 million in hidden profits, and how chain abstraction will usher in greater opportunities.
The Beginning
It all started in late 2022 when Flashbots created MEV-Boost, software that allowed Ethereum L1 validators to obtain transaction blocks from third parties (called Builders, specializing in MEV extraction), which allowed validators to earn more money. After this, almost all Ethereum L1 validators quickly began running this software:
Refer to the image below, initially (#1) Flashbots (in pink) was the only 'Builder' operating, and fierce competition (#2) emerged six months later. Now, there are only two significant builders (#3): Beaver and Titan.
Clearly, many things happened during this period, but one of the most influential events was that in April 2023, Titan reached an exclusive order flow (EOF) agreement with Banana Gun—Banana Gun later became a top telegram trading bot. After this EOF transaction occurred, Titan had the opportunity to build more profitable blocks for L1 validators than any other builders, 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).
More interesting are the profit statistics as of August this year:
Flashbots
Approximately 550,000 blocks were created
Profited 16.7 ETH
Titan
Approximately 600,000 blocks were created
Profited 13,151 ETH
At today's prices, the difference amounts to $44 million.
Although these are public data, some interesting questions remain a mystery:
Why did Banana Gun choose to route almost all of its bundled services to Titan while holding less than 1% of the market share?
Did Titan make a multi-million dollar deal with the Banana Gun team from the start to boost market share?
Did Titan promise to provide kickbacks to the Banana Gun team, thereby harming the interests of its users?
The specific circumstances are unknown, and likely very few people are aware of this information.
As the co-founder and CEO of Omni Network, why would Austin King take the time to delve into such transactions?
Because chain abstraction will unlock greater profit opportunities. The current market is rapidly shifting to focus on the crypto user experience (users won’t consider gas, transaction submission, which chain the transaction is on, etc.), the next wave of users will be far less 'complex' than today's crypto users. New users simply won’t care how all of this happens, and there will be more such opportunities downstream of this abstraction, where each network can gain substantial revenue streams.
Today, the two core primitives of OMNI (EVM + Interop) will be destroyed when used. However, what few people understand is that there are business opportunities when the revenue opportunities of the order flow supply chain are directly introduced into the core model of the token.
