When it comes to DeFi Summer, people often think of Uniswap and Aave, while when it comes to MEV, Flashbots is the name that comes to mind for most people. However, when we see the name bloXroute, many people may not have heard of it. In fact, during DeFi Summer and even earlier, bloXroute's BDN (Blockchain Distribution Network) and RPC routing services were already favored by most DeFi participants. According to BlockBeats, during its heyday, 90% of DeFi transactions and MEV behavior in the market used bloXroute's services. And all of this happened before Flashbots introduced the concept of MEV.

Recently, BlockBeats interviewed Uri Klarman, CEO and co-founder of bloXroute, to discuss the development history of bloXroute, the current state of MEV development, and his views on the future development path of DeFi.

"The Most Primitive MEV"

Before entering the world of cryptography, Uri was a software engineer from Israel. Later, while pursuing a PhD in computer science in the United States, he came into contact with cryptocurrency. Alex Kuzmanovic, co-founder of bloXroute and Uri's former mentor, was a professor who introduced him to the field.

Alex is a well-known professor in the field of computer networks. The two of them hit it off immediately and together they researched and built a system called "Webcoin" and published a paper. Unlike PoW, Webcoin does not require a lot of computation. Instead, it crawls and indexes all web pages on the Internet to build an index similar to what Google has.

Around 2016, the idea of Webcoin led the two individuals to start thinking about blockchain and cryptocurrency. They realized that they could build a system that could quickly spread information on the internet and named it bloXroute because it combines block and transaction routing. During this period, Bitcoin faced many debates, and their idea was that if blocks could be sent faster and more integrity could be propagated, could it support larger blocks, reduce the time between blocks, and help blockchain achieve scalability.

Fast forward to the summer of 2020, the DeFi craze swept the entire industry. Uri realized that if everyone could see transactions faster, they could send transactions faster than in Ethereum mining pools. This is essentially lightning network in the DeFi field, allowing people to make better trades by quickly obtaining and sending information.

Suddenly, all DeFi traders became "customers" of bloXroute. People use bloXroute to fetch, view, and execute their transactions, and they also choose bloXroute's private RPC and order flow to send transactions without being seen. BloXroute was the first to do this before the emergence of Flashbots.

BlockBeats: Let's start with a brief introduction, such as what you have done before, how you entered the encryption field, and why you decided to establish bloXroute?

Uri Klarman: Fast forward to the DeFi craze of the summer of 2020, when we had some fleeting moments of panic. If everyone could see trades faster and everyone could send trades faster than mining pools on Ethereum, the essence is to make better trades by quickly obtaining information and sending it quickly.

This is essentially the lightning network of the DeFi industry. If you are one millisecond faster than others when connecting Chicago and New York with fiber optic, you will soar in the sky of New York and become the first person to arrive in Chicago, and then buy and profit before others because you are fast enough.

So suddenly, all DeFi traders became our clients. They wanted to use us to listen to blocks, view and execute other transactions, and send transactions without being seen. So they chose our so-called private RPC and private order flow. Looking back, what we mainly did was called protected transactions. We were the first to do this before Flashbots existed.

We allow users to send private transactions through their mining pools that are not visible to others, and then Flashbots appeared, suddenly MEV became a thing. We operate a Flashbots relay, and all searchers have become our users and customers because they want to see other transactions.

In 2020, we didn't have any real paying customers at first. Then, over the course of five quarters, we earned $10 million per year, which was a very powerful move from 0 to 1. Then Ethereum transitioned from PoW to PoS, and mev-boost emerged.

Now we have multiple roles, and like others, we are a block builder. We have built a small number of blocks on Ethereum, but the scale is very small. We will not invest heavily in this because it competes with our clients. We are more of a MEV relay, taking over from the block builders, giving to the proposers, and then sending to everyone else.

We provide all of our services to MEV searchers, with clients ranging from Windermute and Jump, as well as large trading companies, to an anonymous independent searcher in a basement in Taiwan, and anyone else from anywhere.

Returning to my journey, I started as a researcher and then founded a company. I have been working in this industry for about 7 years, but deep down, I am first and foremost an internet person, and then an encryption person.

BlockBeats: How did people discover bloXroute and its products during the DeFi Summer explosion? Was it primarily targeted towards institutions or retail investors?

Uri Klarman: At that time, we had 16 people, and basically everyone was a developer. We had no sales, no customers, no sponsors. MEV searchers and DeFi traders spread the word to each other, telling each other that they were using box, and then we reached the peak of routing $1.5 billion in daily trading volume during the DeFi bull market.

This is equivalent to 40% of the DeFi transaction volume on-chain being completed through the services we provide to users and clients. They use our services to execute trades, arbitrage, settle, manipulate, and other operations you can imagine. When the bull market ends and the bear market comes, this data significantly decreases. Our current revenue is about half of the peak of the bull market, but we are still providing routing services for everyone's transactions.

BlockBeats: During the DeFi craze, how much money can you earn every day?

Uri Klarman: Our annual recurring revenue (ARR) once reached $10 million, which means we could earn about $900,000 per month. Although our current revenue has decreased somewhat, our market position has actually improved. During the peak of the bull market, people didn't care and would buy your services, feeling that everyone was wealthy. But when the bear market comes, people start to think about where they should spend money or where they shouldn't.

Many of our users have expressed that they are now closing their doors and going out of business because they are losing money no matter what they do. We love your product and will continue to use it in the future. We are stopping all operations now not because it is not valuable, but because we are ceasing all business activities.

So from 2021 to 2023, we will be collaborating with large-scale developers, working with DEXs, and engaging in very interesting collaborations and discussions with many participants, many of which are related to our infrastructure that is valuable for DeFi transactions and MEV.

Do not follow the path of Flashbots, DeFi needs to compete with CeFi

BlockBeats: Interestingly, although bloXroute launched the project that gave birth to the MEV concept, Flashbots is the company that proposed this concept.

Uri Klarman: During the time when MEV began to become popular, it wasn't called MEV yet. All mining pools knew they shouldn't participate in it, like a referee scoring a goal. Many mining pools have stated that we know we can do it, but we won't because it would be bad and it's taboo, and everyone would be unhappy with us.

Later, the Lightning Network appeared and tore down all the red lines. It was like saying, it's okay, you should do this, because if you don't, others will. Then within six months, Ethereum developers completely changed their views and believed that MEV is now acceptable.

Therefore, I believe that MEV is not a zero-sum game, but a negative-sum game, which is really bad. If validators (formerly miners, now validators) maximize the extraction of more and more value from DeFi, then the pockets of DeFi users and LPs will correspondingly decrease in value, and DeFi will become increasingly worse.

In this way, DeFi will lose its competitiveness. If DeFi becomes worse and worse, the activities and liquidity on DeFi will decrease. For example, if I want to buy Ethereum or anything else on Uniswap or Coinbase as a retail user, I don't have five monitors in front of me and can't track prices at any time.

But I just want to buy ETH at the current price. If I go to Coinbase, I can buy at the current price. But if I buy on Uniswap, I will get the worst execution result, which is the worst price I am willing to accept. For me, there is not much choice.

So compared to CeFi, DeFi performs poorly. And if DeFi performs poorly and is not that useful, it will have less liquidity. In fact, this will bring less MEV to validators, which is very short-sighted. Don't get me wrong, I'm a super DeFi supporter and I think DeFi is very valuable. It is transparent, permissionless, global, always-on 365 days x 24 hours, providing a unified financial infrastructure for the world, and the concept of being unmanipulable is very valuable.

I remember at the Pantera Summit in either 2019 or 2020, one of the heads of the US CFTC, who is also one of the regulators, told the audience that when Bear Stearns went bankrupt in 2008, Obama appointed him. He was in the decision-making circle at the time, and they had to decide whether to save it or let it collapse. They had enough money to save it, but if there were 20 Bear Stearns banks, they wouldn't be able to save them all.

So their decision at the time was to let Bear Stearns collapse, they didn't save it, and then we had the global financial crisis of 2008. After delving into how much money each bank had and what they held, everyone realized that it was impossible to see who held what. They could have saved the situation, just like Detroit today. If we can transparently understand what is actually happening in the banking system, we can completely bypass it, as has become evident in recent Silicon Valley banks and similar events.

We are waiting for whether DeFi has solved these problems. People do not understand how powerful and valuable this thing is. DeFi can accurately know what each protocol and institution owns, how much they own, and the risks they bear. So I think DeFi is crucial and should compete with centralized finance, rather than being its co-pilot. However, the current MEV approach has not led us in this direction. Now it makes DeFi worse and hinders competition with CeFi. Therefore, I am researching alternative solutions to MEV.

Validators don't just increase their share in the pie chart, but make the pie chart bigger, for example 10x, 100x, or 1000x. This is much better than capturing 50% or 90% of the share and making the pie chart smaller. So I am a super supporter of DeFi, but I don't think our current MEV approach supports this, and it's not good enough for DeFi. I am working with various partners to try to improve something.

BlockBeats: What's your take on Flashbots and itshigh valuation?

Uri Klarman: I really like some of the people in Flashbots, but liking them doesn't mean I agree with some of their views. Their early agenda was to minimize MEV as much as possible because MEV affects everything that happens. And for the part that cannot be reduced, it needs to be democratized. This way, it's not just large validators who can extract it, but everyone can use it, creating a centralized force.

As we have discussed with mev-boost, if everyone has access to these third-party block builders, then everyone will receive similar APY. However, I believe that in reality, what we are seeing is the maximum increase of MEV, which, from my perspective, is not good. That is to say, the goal is not to reduce MEV, but to maximize it.

If all validators use the same API, it may be valuable to maximize MEV, and theoretically it can avoid centralization. What we observe is that block construction is actually completed by the top three participants, who occupy about 70% of the block construction share, under the strong control of CeFi and DeFi arbitrageurs.

But returning to my previous point, what I care about is not only the success of DeFi and the competition with CeFi. The current situation is that the MEV that was originally extracted by Jump, Wintermute, and DeFi traders (such as HFT, DeFi arbitrage, etc.) is now flowing to validators. However, this has not helped DeFi users, who are still losing money, and Uniswap LP is also losing money. This money has not flowed to traders, but to validators, and then to ordinary ETH holders, which has not helped DeFi.

Perhaps in the future we will have MEV destruction, so that money will actually be destroyed. However, this is still not helpful for DeFi users who are still losing money, so I am more interested in solutions that focus on improving DeFi value and have the ability to compete with CeFi, rather than focusing on finding ways for everyone to share in MEV.

Some solutions, especially those like the auction of order flow, are basically like this: you make a transaction and I make money, rather than me hitting you on the head with a stick and taking $100 directly from your pocket. I operate behind your transaction, and if you lose money, I will return you a portion. Although this situation is better than being robbed directly, it is still not a good solution, especially if all order flows are now flowing to a small number of participants.

Flashbots is researching jobs like Sauve, which is a different L1 that focuses on MEV and allows coordination of all MEV across multiple chains. This is a very complex process, like you're not just making a transaction, but making a meta-transaction and handing it over to searchers who will compete in an auction-like competition to see who can get this transaction and then hand it over to the builders participating in this extra alternative L1.

Another thing is that there is no real cross-chain MEV, what people are talking about is cross-domain MEV, and this is also true for arbitrage between DeFi. Because CeFi is 50 to 100 times larger than DeFi, 60% of MEV comes from arbitrage between CeFi and DeFi. If you delve deeper, you will know that 91% to 99% of the value actually belongs to validators, but when you are doing CeFi and DeFi arbitrage, about 55% of the value belongs to validators.

You trade here, trade there, maybe you make money, but you take risks. If you don't make money, you won't do it. You also need a lot of liquidity, whether on-chain or on CEX, so it's not that competitive. Therefore, the arbitrage between CeFi and DeFi is much greater than that between Ethereum and Cosmos. As my main point, DeFi needs to compete with CeFi, and currently DeFi is not good enough, like a trailer following CeFi, mainly used to capture arbitrage.

Let MEV Auctions Disappear

BlockBeats: Are MEV and MEV auctions a significant part of bloXroute's business?

Then I have to start thinking from scratch about everything we've done in our business, and I want to make this party even bigger. Currently, we are deploying our MEP (multichain event protocol) solution for BSC, and you can imagine that we are building a MEV solution that allows everyone to compete with us.

BlockBeats: Is there any mathematical principle behind your statement that you can earn more money when MEV becomes larger?

Uri Klarman: Many holders of Ethereum hope for its success, including myself. For example, I have this token, that token, let me try being an LP on Uniswap, try this, try that. So there are quite a few activities with ETH and USDC, as well as other things related to ETH.

We, who hope for the success of Ethereum, are willing to put our money there. But for those who are not for Ethereum, they want to make money through transactions. Where do they trade? On CeFi, not DeFi, because DeFi cannot provide them with the best prices.

Then look at Bitcoin. Many people are trading Bitcoin, and the BTC trading volume on CeFi is twice that of Ethereum. And 99.5% of things happen on CeFi, with the remaining 0.5% happening on DeFi. Why aren't they trading on DeFi? Because DeFi is not good enough. Again, whether you like Bitcoin or not, this is irrelevant. Is DeFi useful? Will people trade their Bitcoin on Ethereum? The answer now is no.

Once we make DeFi more valuable and competitive with CeFi, it is possible that the volume of Bitcoin transactions on DeFi will be similar to or greater than that on Ethereum, as we see twice the transaction volume on DeFi in CeFi. But what percentage of the market share does DeFi currently hold? Can we make it reach 50%? Can it reach 500%? I hope DeFi can win, I don't want it to be just a small part.

We know that CEX can go bankrupt, as seen recently with FTX, and in the past with Mt.Gox and other similar events. This is not the first, second, third, or fourth time we have seen this situation. Despite knowing that CeFi may go bankrupt, people still choose to keep their money in CeFi instead of DeFi. Why?

We are not just talking about ordinary people like you and me, but professional risk investment companies and funds that understand risks. They choose to trade because CeFi is better. We need DeFi to become better to compete with CeFi. If we can do this, the market share may expand by 10 times or even 100 times. Ultimately, I believe we can expand it by 1000 times. That's why I don't want to prove the current market share of DeFi, but rather think about how to occupy 30% or 50% of the market share in a market that expands by 100 times.

BlockBeats: Will the situation you just described cause a lot of reactions from the MEV community? Will the term MEV still exist in the future?

Uri Klarman: I believe MEV will always exist. Flashbots hopes to define success, they hope to be decentralized, just like we hope, but I care more about usability than others. I think if no one uses the most decentralized thing, it's useless. I don't want to build it, I want it to be decentralized and useful. We can't throw away usability, otherwise what we're doing here is meaningless, or at least a thousand times less meaningful.

Therefore, there is always value that can be extracted, but you can set an option - everyone sends their transactions to me, and I accept the one who pays me the most, and not the others. Or you can extract a basis point from the transaction volume, and try to achieve real-time, first-come, first-served, just like a centralized trading platform, providing the same utility to obtain the current price, no one will cut in line, and always get the correct price, because arbitrageurs will trade and the price will fluctuate in one direction.

Can we achieve pre-confirmation? How do we achieve first come, first served? What is fairness? I'm not saying these questions are insignificant, but my point is that this will actually make everyone earn more money, which is more valuable to users and validators. So this is not about making MEV disappear, but about making MEV auction disappear.

BlockBeats: So MEV itself is neutral, but MEV auctions are the part that everyone likes to participate in.

Uri Klarman: In my opinion, auctions are the worst part. Do you know why people hate high-frequency trading companies? We don't want decentralized finance (DeFi) to become centralized finance (TradFi), right? We don't want high-frequency traders to come in and play with their picoseconds (Editor's note: 1 picosecond equals 10 to the negative 12th power seconds (1 ps = 10^-12 s), used to describe extremely short time spans in the financial industry).

Why do we dislike them? Because they engage in manipulative trading, whether through monitors or other means, they will see your transaction come in, and then you could have bought at the current correct price, but before you, they have already bought, so you buy at a higher price because they saw your transaction and acted on it.

Now, the MEV auction movement has arrived. If someone starts trading faster than others, they will get that price, which is fine. I'm not saying I don't have 10 different monitors and complicated things in front of me, I just want to send the transaction and get the current price, and no one can adjust their trades because they see what I'm about to do and trade in front of me.

In simple terms, if I initiate a transaction and someone else also initiates a transaction, regardless of the order in which they arrive, whoever arrives first wins. Sometimes they win, sometimes I win, depending on who sends the transaction first and when it is sent. My view is that if I send my transaction, others can only see it after I have completed it and cannot take action before that.

So I believe that MEV is not a neutral force, and there are no good or bad MEVs. However, there are indeed bad MEVs, called front-running transactions, which means that they see someone's actions before they take them and gain value before that. This is different from arbitrage or retrospective trading, which is just a fancy word for arbitrage. It means that I will capture arbitrage opportunities after you, or take action immediately after I see your behavior.

This is actually a good thing, and I like arbitrage. If the price on Uniswap is one value, the price on Balancer is another value, and the prices on Binance and Coinbase are the third and fourth values respectively, I hope arbitrageurs and high-frequency traders will constantly correct the prices whenever there is a transaction, so that the prices are always correct. So when I send my transaction, I will get the current correct price, which is what I hope to get from DeFi.

BlockBeats: Will this replace the role of crypto market makers?

Uri Klarman: No, these two are actually the same thing. People trade, and if the price is not right, market makers try to capture the difference. The main difference is that validators no longer say, "Listen, I'm about to create the next block, how much are you willing to pay?" And then the price fluctuates to a certain point.

Instead, what is being done is to maximize the share of validators, but this is only a very small share and not very useful. Instead, you can imagine that they would process transactions in real-time on a first-come, first-served basis and charge a basis point fee. Due to the many activities within these 12 seconds, prices rise, fall, and rise again. By constantly correcting prices, validators earn significant profits like all traders and DeFi arbitrageurs. They have no opportunity to withdraw funds from DeFi. Instead, they charge fees to capture funds, which will make DeFi better and able to compete with CeFi.

So capturing the cost of a base point is equivalent to how much money we put in. But if we expand it by 10 times, 100 times, it is definitely a better choice if we can do it. But the question is, should we do this? Should we achieve the goal of "real-time, first-come, first-served, fair sorting"?

BlockBeats: What do you think is the likelihood that we are moving towards the direction of Flashbots and all MEVs that we are currently discussing, which is the direction you don't like, and where we may be heading?

Uri Klarman: If there is a question that can replace this question, it would be asking what are the chances of successfully pushing DeFi into a different field. If you are a founder, you would say that you want to change the world. However, it is difficult for a founder of a large company to try to do big things. Unless you are an individual like me, I believe that I will change the way DeFi operates because I think I can do it. Most people would say that Uri, you can't do it, or I would ask myself, can I change everything? They would say no, but I believe that I can change everything. This has less to do with ability and more to do with a personal trait of having confidence in oneself to achieve it.

If you are in academia, this is like your second major where you write a paper that gets rejected, then you adjust it and send it to someone else, then get rejected again, and again, and again. The first rejection hurts a lot, the second one hurts more, and the third one stings a bit. After that, you just wait for the rejection letter and send it out again. But then you will have many papers, one will be accepted here, and another will be accepted there.

Perhaps you can't imagine a successful path. We will try that, but it won't work. We will do this, and it won't work either. Then we will do this, and in the end, we will win. Going back to your initial question, we are now on the development trajectory of MEV auctions and DeFi, which makes DeFi less useful and unable to compete with CeFi. But I believe we have the opportunity to change this, to take a different path and trajectory, and to make DeFi compete with CeFi. This is the future I am striving for.

BlockBeats: What projects or teams are currently working together at bloXroute?

Uri Klarman: Alex Mizrahi, who used to work at Flashbots (he worked there, but I think he has left now), made a very good comment in a chat, roughly saying, "You can't imagine how many Lightning Network people really want to see a better future than now." I don't remember the specific details, but they all want to see a world where DeFi and CeFi coexist, rather than extracting all the value.

We need to think about how to achieve this goal, what methods to adopt, and the pros and cons of each direction. In the DeFi field, most of the people I have met believe that this is a good future, and few people do not want to see such a scene.

Some people say that we cannot achieve such a future, some say that I think this is not feasible, and we cannot achieve fair sorting. But we can try to do this, starting from the other side of the DeFi world and gradually approaching you, so that even if someone sees your transaction, they cannot cut in line because the speed of light is helping you unpack first.

Can we do it? Can we overcome these huge technical challenges? This is the direction I am striving to explore. In the competition between DeFi and CeFi, usability is crucial. How can we achieve this goal? How can we achieve democratization? If we do not extract MEV, someone else will. Therefore, we need to democratize it and make it as fair as possible for everyone to share. Perhaps we will destroy it, or validators will receive it.

BlockBeats: bloXroute also has a small portion of builder business. Please talk about the market for "Block Builders" and "Block Producers".

Uri Klarman: If there is a searcher who finds an opportunity and wants to seize it, whether it is on-chain arbitrage or trying to trace back or pre-execute bundled transactions after seeing a transaction, he actually does not know how much capital should be invested, and then he almost invests all the capital.

These searchers do not know what other searchers are doing or how much they have bet, but basically they have to bet almost all of their money. The block builders are mainly engaged in CeFi and DeFi arbitrage. They collect searcher bundles and conduct huge ETH, USDC, BTC, ETH or USDC, USDT CeFi, DeFi arbitrage through the 12-second UniSwap price. Because the UniSwap price updates every 12 seconds, they can flexibly adjust the actual payment fee paid at the last moment.

The block builder will construct a block that can store for a longer period of time over time to create better and better blocks, constantly improving and building better blocks. They start bidding in the last 200 milliseconds, trying to become the highest payer, while also comparing how their captured value compares to others.

If they earn $1000 in capturing CFA (such as USDC), they may propose $500 and suggest $610 when they see that others' block values are $600, and such changes happen very quickly at the last minute because only at that moment do they truly understand what the opportunity is. The price changes in real-time, and if you bet within five seconds, the price may drop, and you may lose money. So you want to wait until the last minute to place your bet.

You can see an interesting dynamic where, when the value of a block is low, many proposers will compete to bid and continuously offer the best price in an attempt to obtain the block at this price before reaching the expected optimal value. They will not release all of the value because it does not make sense for them.

Capturing CeFi-DeFi arbitrage carries risks. It is possible that the price of CeFi has changed by the time the trade is executed, resulting in losses. Therefore, risk compensation is necessary while also aiming for profits. If they cannot earn a profit of 1 or 2 basis points, they will not engage in the trade. In other words, it is not worth it for them to do so without profits. Therefore, we find that CeFi and DeFi arbitrageurs are better suited for blockchain construction than anyone else. In reality, they can capture C-D arbitrage and adjust the actual payment or non-payment amount at the last moment.

BlockBeats: It is said that there are only a few major players in the Builder market, and individual businesses cannot profit from it. What do you think? Should we address this issue?

Uri Klarman: If you only want to be a searcher, you can create a bundle, borrow one million dollars for trading, buy here and sell there, and you earn 1 dollar to repay the loan. Taking cents as an example, you earn 99 cents, give 90 cents to the validator, and you net 9 cents. If this doesn't work, the loan will be returned without risk, and it won't belong to the block builder, but anyone can do it anywhere in the world.

If you want to become a block builder, you need to have the ability to capture CeFi and DeFi arbitrage opportunities. To do this, you need a lot of money, a lot of funds on centralized trading platforms, and a lot of funds on DeFi. It's not just a matter of buying ETH here and transferring it elsewhere to make a profit, such as buying $1 million worth of ETH on DeFi and selling $1 million worth of ETH on Coinbase or elsewhere, in which case the holding amount generally remains unchanged.

You need millions here, millions there, and another million in reality. Therefore, there is a need for a large amount of capital and risk management. This is a very big operation, and not many participants are doing it because you not only need to do KYC on centralized exchanges, but also because their regulatory risk tolerance varies. Therefore, some people trade tokens, while others do not, because some large high-frequency trading companies do not want regulatory agencies to be angry with them because of this issue, while others may take a chance and do everything.

So you need different solutions to meet different CeFi and DeFi arbitrage needs, but they are all large and involve a lot of capital. Trading in the United States will be more difficult due to jurisdiction, but if in places like the Bahamas, regulatory issues may not be a concern.

We are currently working with our partners to explore ways to bridge this gap. Imagine not having to be a CeFi or DeFi entity, but rather a researcher and a participant in large CeFi entities who offer you a quote to trade and buy ETH at a price that is not necessarily equal to the CeFi price, as they profit from it, but also provide CeFi pricing to DeFi participants.

Therefore, small participants who do not have a large amount of funds on CeFi may suddenly become participants who have funds and provide quotes to others. However, they will charge a certain fee on this basis, which may make the entire ecosystem more profitable, and this is what we are exploring.

BlockBeats: I think BSC is also very important to bloXroute. Can you explain in detail the relationship between BSC and you?

Uri Klarman: We have played an important role in the BSC field for a long time. There was a lot of trading activity on BSC at the end of 2020, so people like DeFi and cross-chain transactions. DeFi happens on Ethereum, and DeFi also happens on BSC, but on a smaller scale than Ethereum. Arbitrum has been developing and you may have wanted to add it to the list four months ago. After Friend.Tech appeared, we may see more activity on Base, but the real activity is happening on Ethereum and BSC.

Therefore, Ethereum includes the development of the entire MEV ecosystem, including mapping and proof of work, and we can see its development changes. On BSC, people use our products to quickly obtain blocks, but we have only recently started working with validators in an attempt to help them build better blocks.

Similar to the Flashbots proposal on Ethereum, we hope that all validators can receive roughly the same APY. If some perform better and some perform worse, then some may have a higher APY, which creates a centralized force that everyone will adhere to.

So we decided to build a method that allows validators to accept third-party blocks, not just from bloXroute, but also from others. So we built this infrastructure, allowing others to compete with us, and we are confident in our competitive ability.

We allow each validator to construct their own block and obtain a block from us, and then choose from it. We can continuously build better blocks because we can see transactions and blocks faster.

So we are currently onboarding MEV searchers, trying to capture arbitrage opportunities and the like. This is a bit of a chicken-and-egg situation, as in a growing network effect, we already have many validators, so we have more searchers. The more searchers use us, the more value is created for validators. So we find ourselves working with validators to help them increase their APY, as well as working with DeFi participants.

Regardless of whether we have a partnership with PancakeSwap or not, basically everyone can send transactions to us and we will protect them from manipulation. We will conduct transactions afterwards and capture any realizable value behind them, giving a portion to validators and a portion to searchers. Suppose you leave $100 on the table, but you only trade here instead of on all DEXs, then this is not a good trade, and we can provide some rebates. Most importantly, for pre-trade transactions, if you are about to make a large transaction, you will definitely want to send it through us.

We have good cooperation with the BSC Foundation, validators, and DeFi participants to build something different from what we see on Ethereum. Because BSC is different from Ethereum, it is between block builders and validators, and there are very few validators here. So we will try to hand over a block to the validators, and if they want to solve this problem, they can solve it, which can prevent sandwich attacks. We have a good working relationship with BSC and can see its gradual development over the past few months.

欢迎加入律动 BlockBeats 官方社群：

Telegram 订阅群：https://t.me/theblockbeats

Telegram 交流群：https://t.me/BlockBeats_App

Twitter 官方账号：https://twitter.com/BlockBeatsAsia