Ethereum Block Creation Dominated By Two Companies

According to PANews, a significant portion of Ethereum block creation is dominated by just two companies, Beaver and Titan, which together account for over 90% of the blocks. This situation traces back to the introduction of MEV-Boost by Flashbots at the end of 2022. MEV-Boost is a software that allows Ethereum L1 validators to obtain transaction blocks from third-party builders, enhancing their earnings. Following its introduction, nearly all Ethereum L1 validators adopted this software. Initially, Flashbots was the sole builder, but competition intensified over the following months. By April 2023, Titan had secured an exclusive order flow agreement with Banana Gun, a leading Telegram trading bot. This agreement allowed Titan to construct more profitable blocks for L1 validators by accessing higher-reward transactions exclusively. Consequently, the majority of Ethereum L1 transactions now originate from Beaver and Titan. Financial data up to August 2023 reveals that Flashbots created approximately 550,000 blocks, earning 16.7 ETH, while Titan created around 600,000 blocks, earning 13,151 ETH. This difference translates to a profit margin of $44 million at current prices. Despite the transparency of these figures, several questions remain unanswered. For instance, why did Banana Gun choose to route its services almost entirely through Titan when it held less than 1% market share? Did Titan initially strike a multi-million dollar deal with Banana Gun to boost its market presence? Was there a promise of rebates to Banana Gun's team that might have compromised user interests? These questions remain largely speculative, with few having concrete answers. Austin King, co-founder and CEO of Omni Network, delves into these transactions because they highlight the potential for greater profitability through chain abstraction. As the market shifts towards enhancing the crypto user experience, the next wave of users will likely be less concerned with the intricacies of transactions, such as gas fees or which chain is used. This abstraction could unlock more opportunities for networks to generate substantial revenue streams. Currently, Omni's two core primitives, EVM and Interop, are destroyed upon use. However, few understand the business potential when order flow supply chain revenue opportunities are directly integrated into the token's core model. This presents a significant commercial opportunity.