Flashbots

What Is Flashbots?

Flashbots is a research and development organization founded in 2020 to address the negative externalities of MEV on Ethereum. MEV refers to the profit that block producers can extract by reordering, inserting, or censoring transactions within a block. Before Flashbots, MEV extraction happened through opaque "priority gas auctions" that congested the network, raised gas fees for ordinary users, and created an uneven playing field.

The project grew out of the 2019 academic paper "Flash Boys 2.0" by Phil Daian and others, which documented how arbitrage bots on decentralized exchanges were front-running users and destabilizing consensus. Flashbots' mission is organized around three pillars: illuminate (bring transparency to MEV activity), democratize (provide open access to MEV extraction tools), and distribute (enable fairer redistribution of MEV value to users and validators).

Flashbots has evolved through several product phases: the original Flashbots Auction for proof-of-work Ethereum, MEV-Boost for post-Merge proof-of-stake Ethereum, Flashbots Protect for end-user transaction privacy, MEV-Share for user MEV refunds, and most recently BuilderNet for decentralized block building.

How It Works

Flashbots operates several interconnected systems that span the full MEV supply chain: from transaction submission to block construction to validator selection.

Flashbots Protect

Flashbots Protect is a free, private RPC endpoint that users and wallets can connect to instead of a standard Ethereum RPC. Transactions sent through Protect never enter the public mempool, making them invisible to MEV bots that scan for front-running and sandwich opportunities.

1. The user sends a transaction to the Flashbots Protect RPC endpoint
2. The transaction enters a private mempool operated by Flashbots, never broadcast publicly
3. The MEV-Share node selectively shares configurable hints about the transaction with searchers
4. Searchers can only submit backrun bundles (not front-runs or sandwiches) based on these hints
5. The transaction and any winning backrun bundle are forwarded to block builders for inclusion
6. Up to 90% of MEV value captured from backrunning is refunded to the original user

A key property of Protect: transactions are either included on-chain exactly as submitted or dropped entirely. Users never pay gas for failed transactions. As of late 2024, over 2.1 million Ethereum accounts have used Flashbots Protect, with $43 billion in cumulative DEX volume protected.

MEV-Boost and the Block Auction

MEV-Boost implements proposer-builder separation for proof-of-stake Ethereum. It separates the roles of transaction ordering and block proposal into distinct actors:

• Searchers monitor blockchain state for MEV opportunities and construct transaction bundles
• Block builders receive bundles from searchers plus public mempool transactions and assemble the most profitable possible block
• Relays act as trusted intermediaries: they receive complete blocks from builders, verify them, and present only the block header to validators
• Validators run MEV-Boost software and select the highest-paying block header, signing it before the relay releases the full block payload

Over 90% of Ethereum validators use MEV-Boost. The system creates a competitive market where builders compete on block profitability, which pushes MEV value toward validators and, through mechanisms like MEV-Share, back to users.

Bundle Submission

Searchers interact with Flashbots by submitting bundles: groups of transactions that must execute atomically (all succeed or none do). Here is the structure of a bundle submission:

// Flashbots bundle submission via eth_sendBundle
{
  "jsonrpc": "2.0",
  "method": "eth_sendBundle",
  "params": [
    {
      "txs": [
        "0x02f8...",   // signed transaction 1
        "0x02f8..."    // signed transaction 2
      ],
      "blockNumber": "0x1234567",
      "minTimestamp": 0,
      "maxTimestamp": 1700000000,
      "revertingTxHashes": []
    }
  ]
}

The txs array contains signed transactions executed in order. The blockNumber field targets a specific block for inclusion. Searchers typically include a payment to the block builder via a direct ETH transfer to the builder's address as their bid. Losing bundles pay nothing: no gas costs for failed MEV attempts.

BuilderNet

Launched in November 2024, BuilderNet is Flashbots' decentralized block building network. It uses trusted execution environments (TEEs) to allow multiple independent operators to run identical open-source builder instances. Orderflow providers send encrypted transactions to TEE instances, and operators cannot leak data or tamper with the building logic.

In December 2024, Flashbots migrated all builders, orderflow, and refunds to BuilderNet and ceased operating any centralized block builders. The initial operator set includes Flashbots, Beaverbuild, and Nethermind.

Use Cases

User Transaction Protection

The most common use case is shielding ordinary users from MEV extraction. When a user swaps tokens on a DEX through the public mempool, bots can detect the pending transaction and execute a sandwich attack: buying before the user (raising the price) and selling after (profiting from the artificial price movement). By routing through Flashbots Protect, the transaction stays private until inclusion, eliminating this attack surface.

Searcher MEV Extraction

Professional searchers use Flashbots to submit arbitrage and liquidation bundles without competing in public gas auctions. The sealed-bid format means searchers only pay when their bundle is included, and losing bids cost nothing. This dramatically reduces the negative externalities of MEV extraction compared to the pre-Flashbots era of gas price bidding wars.

Validator Revenue Optimization

Validators using MEV-Boost earn higher block rewards by selecting the most profitable block from competing builders. Without MEV-Boost, validators build blocks locally and capture only base fees and tips. With MEV-Boost, they receive blocks that include MEV value extracted by searchers, significantly increasing per-block revenue.

Protocol-Level MEV Management

DeFi protocols integrate with Flashbots infrastructure to manage MEV at the application layer. For example, DEX protocols can route user transactions through Protect to prevent front-running, or design order-flow auctions where MEV is redistributed to liquidity providers or traders rather than extracted by third parties.

Risks and Considerations

Relay Centralization

Flashbots' relay has historically handled the majority of relay-produced Ethereum blocks. While alternative relays exist (BloXroute, Ultra Sound, Agnostic Gnosis), this concentration creates a single point of failure and a single point of control. If the Flashbots relay goes down, a significant portion of the block building pipeline is disrupted.

Censorship Concerns

After the U.S. Treasury sanctioned Tornado Cash in August 2022, the Flashbots relay began excluding transactions involving OFAC-sanctioned addresses. By November 2022, 63% of all Ethereum blocks were OFAC-compliant, crossing a threshold that alarmed the community about Ethereum's censorship resistance. Flashbots co-founder Stephane Gosselin resigned in protest.

Flashbots responded by open-sourcing its relay code (enabling third-party relays without OFAC filtering) and releasing a min-bid feature in MEV-Boost that lets validators build blocks locally when relay bids fall below a threshold. This raises the probability of censored transactions being included in subsequent blocks.

Trust in Relays

The current MEV-Boost architecture requires validators to trust relays. Relays see full block contents and could theoretically steal MEV, censor transactions, or fail to deliver valid blocks. While relay reputation and open-source code mitigate this, the trust assumption remains a structural weakness that enshrined PBS (protocol-level proposer-builder separation) aims to eventually eliminate.

Builder Centralization

Despite Flashbots' efforts, block building on Ethereum remains concentrated among a small number of builders. Exclusive orderflow deals, where wallets or protocols route transactions to a single builder, further entrench dominant players. BuilderNet and SUAVE aim to address this, but the competitive dynamics of block building naturally favor scale.

Flashbots and the Broader MEV Landscape

Flashbots has fundamentally reshaped how MEV works on Ethereum, but the problems it addresses are not unique to one chain. MEV exists wherever transaction ordering matters: on rollups (where sequencers order transactions), on sidechains, and even on Bitcoin layer-2 networks. The concepts Flashbots pioneered, such as sealed-bid auctions, private mempools, and builder separation, are being adapted across the blockchain ecosystem. For a deeper analysis of how MEV dynamics play out on Bitcoin's second layers, see the research on Bitcoin L2 MEV extraction.

Flashbots' evolution toward SUAVE (Single Unified Auction for Value Expression) reflects the recognition that MEV is a cross-chain problem. SUAVE aims to create a unified auction mechanism across multiple chains and rollups, with decentralized block building at its core. The original SUAVE execution node was migrated to a new codebase in May 2025, and the system operates in production with L2 integrations.

Solutions like Spark that operate on Bitcoin's layer-2 landscape face a fundamentally different MEV environment. Bitcoin's UTXO model and lack of a global state machine limit the types of MEV that can be extracted compared to Ethereum's account-based model. However, as DeFi activity grows on Bitcoin L2s, the lessons from Flashbots' approach to transparency, fair ordering, and user protection become increasingly relevant.

This glossary entry is for informational purposes only and does not constitute financial or investment advice. Always do your own research before using any protocol or technology.