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Few people know that only two companies create 90% of Ethereum blocks. Few people know the reason behind this monopoly. Here is a three-part story about Titan’s hidden profit of over $40 million and how chain abstraction will bring greater opportunities:

1) The rise of Titan Builder

2) Huge differentiation in profits for block builders

3) Huge opportunities for chain abstraction: Omni’s strategic thinking

At the end of 2022, Flashbots launched the MEV-Boost software. This software allows Ethereum mainnet validators to obtain transaction blocks from third-party "builders" instead of building them themselves. Builders are good at extracting maximum extractable value (MEV), which allows validators to make more money, so almost all validators quickly adopted this software.

1) The rise of Titan Builder 📍

At first, Flashbots was the only builder on ETH. But after half a year, competition emerged. Eventually, only two really important builders remained: Beaver Build and Titan Builder became the dominant ones.

In April 2023, Titan Builder reached an exclusive transaction flow agreement (EOF) with Banana Gun, a top Telegram trading robot. This means that Titan Builder has exclusive access to Banana Gun's transaction information, allowing it to build more profitable blocks and obtain higher profits than other builders.

By the way, more than 90% of the world’s Ethereum L1 transactions now come from these two companies

2) Huge differentiation in profits for block builders📍

Data from August this year shows huge differences in profitability among block builders:

Flashbots: built about 550,000 blocks and earned 16.7 ETH.

Titan: built about 600,000 blocks and earned 13,151 ETH.

Based on the ETH price at the time, Titan’s profit was about $44 million higher than Flashbots. These data are all public information. However, some key questions remain unanswered, such as:

Why did Banana Gun (a trade bundler) send orders almost exclusively to Titan Builder, which had less than 1% market share at the time?

Did Titan give the Banana Gun team a massive multi-million dollar deal to quickly increase market share?

——Did Titan promise to rebate to the Banana Gun team, thereby harming the interests of its users?

The answers to these questions are currently little known.

3) Huge opportunities for chain abstraction: Omni’s strategic thinking 📍

As a co-founder of Omni, why am I so concerned about these types of transactions?

Because chain abstraction will unlock greater profit opportunities. In the future, the user experience of cryptocurrency will be more simplified, and users will not need to worry about gas fees, transaction submission methods, and which chain the transaction occurs on. The new generation of users will be much simpler than us "old guards" and will not care about the underlying technical details. Under this abstract layer, the network will bring more high-profit revenue sources similar to the above cases.

Currently, Omni’s native token, OMNI, is destroyed when used for core functions (EVM and interoperability). However, few people realize that there is huge potential in the core model of directing revenue opportunities in the order flow supply chain to tokens.

We’ll be sharing more publicly about our plans for this design pattern soon, but until then, I think the industry needs to think more deeply about the huge opportunities this new type of design presents.

🔹Compiled original link: https://twitter.com/0xASK/status/1861411479129379135?s=19