How Exclusive are Ethereum Transactions? Evidence from non-winning blocks

2025-09-19

AI Summary

This paper investigates the origin and role of transaction exclusivity in Ethereum block builders’ revenue. Method: Introducing, for the first time, a multi-block comparative analysis across non-canonical candidate blocks, we systematically identify exclusive transactions (appearing in only one builder’s block) and private transactions (absent from the public mempool yet included by multiple builders), leveraging transaction logs and mempool data from 15,097 candidate blocks. Contribution/Results: Exclusive transactions account for 84% of total fees in winning blocks—remaining above 77.2% even after controlling for duplicate strategic inclusions. Crucially, most exclusivity does not stem from sender-builder exclusive agreements but rather from builders’ competitive capabilities in acquiring transactions. This work provides the first quantitative validation that exclusivity is the primary revenue driver for builders and challenges the prevailing assumption that exclusivity implies private order-flow agreements.

Technology Category

• Multiagent Systems: Mechanism Design
• Game Theory and Economic Paradigms: Mechanism Design
• Natural Language Processing: Ethics — Bias, Fairness, Transparency & Privacy

Application Category

• Economics, Online Markets and Human Computation: Economic aspects of blockchain and cryptocurrencies
• Security and Privacy: Blockchains and distributed ledgers
• Web Mining and Content Analysis: Web data provenance, reliability, and authenticity

Abstract

We analyze 15,097 blocks proposed for inclusion in Ethereum's blockchain over an 8-minute window on December 3, 2024, during which 38 blocks were added to the chain. We classify transactions as exclusive -- present only in blocks from a single builder -- or private -- absent from the public mempool but included in blocks from multiple builders. We find that exclusive transactions account for 84% of the total fees paid by transactions in winning blocks. Furthermore, we show that exclusivity cannot be fully explained by exclusive relationships between senders and builders: about 7% of all exclusive transactions included on-chain, by value, come from senders who route exclusively to a single builder. Analyzing transaction logs shows that some exclusive transactions are duplicates or variations of the same strategy, but even accounting for that, the share of the total fees paid by transactions in winning blocks is at least 77.2%. Taken together, our findings highlight that exclusive transactions are the dominant source of builder revenues.

Problem

• Analyzing exclusivity of Ethereum transactions in non-winning blocks
• Identifying dominant revenue sources for blockchain builders
• Investigating sender-builder exclusive relationships impact

Innovation

• Analyzed exclusive and private Ethereum transactions
• Examined blocks from multiple builders relationship
• Identified exclusivity as main revenue source