Flashbots

Flashbots is a research and development team focused on maximal extractable value (MEV) on Ethereum and other blockchains. The group builds tools to make MEV accessible to users who otherwise might be technically or financially able to participate, making the process more transparent. As of May 2022, over $600m has been extracted through MEV using Flashbots.

History

Flashbots was founded in 2020 by thegostep and first announced in joint posts on ethresear.ch and Medium on November 23, 2020. The post outlines the "MEV crisis" causing network and chain congestion, and proposed the group's approach to mitigating the negative effects of the bidding wars for block space. Previously, MEV strategies could only be carried out through deals with individual miners or by miners themselves. Flashbots creates a fairer, more efficient market for Ethereum block space. One of their most well known tools is MEV-explore, a MEV dashboard and data aggregator.

In addition to publishing research, Flashbots contributors build tools that make products like MEV-resistant decentralized exchanges possible.

Flashbots also offers whitehat services for individuals whose wallets are compromised, occasionally requiring lost assets.

The first year

The first Flashbots bundle was mined in block 11550019 on Dec-29–2020 04:33:22 PM UTC.

In January 2021, Flashbots Alpha was released on Discord. The initial tooling allowed anyone the ability to write a bot, called a searcher, that submits Flashbots transactions in groups called bundles to miners who participate. Later that month, one of the first NFT rescues on Ethereum took place, only possible due to how Flashbots transaction bundles are constructed.

In March 2021, 12 mining pools (including four of the top five) were receiving Flashbots bundles, representing over 58% of Ethereum hashrate.

By July 2021, over 2/3 blocks on Ethereum included a Flashbots bundle.

Products

Flashbots has produced a number of MEV-related products and tooling.

Flashbots Auction & Flashbots Relay

Flashbots Auction is a permissionless, transparent, and fair marketplace for MEV participation and frontrunning protection. Flashbots auction works by providing a private transaction pool with a sealed bid block space auction mechanism that lets miners trustlessly find optimal transaction ordering for a block. Relayers like Flashbots Relay collect transaction bundles from searchers and forward them to miners.

Flashbots Protect RPC

Flashbots Protect RPC is an RPC endpoint that users can add to their wallets in order to send their transactions to Flashbots for frontrunning protection, no fees for failed transactions, and priority in blocks.

MEV-Inspect

MEV-Inspect is an analytics tool for finding MEV data on a blockchain. Given a block, mev-inspect finds:

• Miner payments (gas + coinbase)

• Tokens transfers and profit

• Swaps and arbitrages

Flashbots data can be queried through Dune Analytics thanks to an integration with MEV-Inspect.

MEV-Explore

MEV-Explore is a dashboard meant to help the community understand and quantify MEV activities on Ethereum in a way that is accessible and understandable by average users.

MEV-Boost

MEV-Boost is Flashbots' eth2 merge-ready architecture for building a system similar to Flashbots Auction on proof of stake Ethereum.

Research

Transparent research focused on MEV-relevant topics such as auction design, privacy, and MEV in eth2 and on L2s.

Research topics include:

• Auction Design
• Cryptographic Privacy
• Cryptoeconomic Privacy
• MEV in ETH 2
• MEV in L2
• MEV Taxonomy
• Account Abstraction
• Protocol Design
• Search Optimization
• Flashbots as Critical Infrastructure

Published research:

• Frontrunning the MEV crisis
• Quantifying realized extractable value
• MEV-SGX -- A sealed bid MEV auction design
• MEV in eth2 - an early exploration
• MEV and EIP-1559
• MEV-Boost -- Merge ready Flashbots Architecture
• Unity is Strength - A Formalization of Cross-Domain Maximal Extractable Value
• On the Formalization of MEV
• Speeding up the EVM (part 1)