(Builder+ LOGO)
BTCS Builder functions as a proprietary specialized Ethereum block builder.
Utilizing advanced algorithms, it strategically rearranges and compiles transactions to achieve the most profitable block also know as maximal extractable value (MEV).
Searchers are individuals or entities who independently participate in the network and continuously monitor the public mempool. Their primary objective is to identify opportunities of Maximum Extractable Value (MEV). To achieve this, they employ automated bots to find ways to reorganize transactions in a unique way, enabling them to extract value from the transaction ordering process. After identifying a profitable bundle of transactions, the searcher then notifies the builder of this opportunity.
Searchers are individuals or entities who independently participate in the network and continuously monitor the public mempool. Their primary objective is to identify opportunities of Maximum Extractable Value (MEV). To achieve this, they employ automated bots to find ways to reorganize transactions in a unique way, enabling them to extract value from the transaction ordering process. After identifying a profitable bundle of transactions, the searcher then notifies the builder of this opportunity.
Lifecycle of Ethereum transaction, click any section to learn more.
Designed for the mountains
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BTCS Builder functions as a proprietary specialized Ethereum block builder. Utilizing advanced algorithms, it strategically rearranges and compiles transactions to achieve the most profitable block.
Maximal extractable value (MEV) refers to the maximum value that can be extracted from creating a block on top of the standard block reward and gas fee. This is done by including, excluding, or reorganizing the transactions in a block. One common type of MEV opportunity is arbitrage which allows a searcher to capitalize on price discrepancies.
When a user initiates a transaction, it is initially sent to the mempool. The mempool functions as a temporary storage space for pending transactions that are awaiting confirmation and inclusion in a block. This area where transactions wait is publicly accessible, meaning anyone can view the contents of these transactions before they are permanently recorded on the blockchain.
Searchers are individuals or entities who independently participate in the network and continuously monitor the public mempool. Their primary objective is to identify opportunities of Maximum Extractable Value (MEV). To achieve this, they employ automated bots to find ways to reorganize transactions in a unique way, enabling them to extract value from the transaction ordering process. After identifying a profitable bundle of transactions, the searcher then notifies the builder of this opportunity.
The builder plays a crucial role in the transaction process by aiming to maximize the profitability of each block. It achieves this by simulating different transaction orderings within the block and identifying the most profitable arrangement based on the current public transactions. Once the builder identifies the optimal block, it must bid and pay a fee to a validator to propose the block to the rest of the network.
Relays play a crucial role in bridging the connection between the builder and the validator. Operating like an auction system, a validator will choose the block with the highest fee offered for it from the builder. One essential aspect of this mechanism is that the validator remains unaware of the block's contents until they sign and validate the transaction. Generally, relays are open-source and available for free use.
Validators take on the important tasks of proposing blocks and achieving consensus in the network. When a builder creates a block, it is offered for validation, and the builder’s block with the highest bid will be selected for the next proposal. The validator then signs the block and broadcasts it across the network. Once the other validators acknowledge and recognize the block, the transaction becomes confirmed and becomes a permanent part of the blockchain.
How Builders add Value to the Blockchain
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1
MEV Capture
The Builder positions validators to capture the Maximal Extractable Value (MEV) from transactions within a given block. This ensures that validators can unlock additional revenue streams above and beyond the standard block reward and gas fee.
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2
Validator Inclusivity
Thanks to the builder, all validators now have access to boosted MEV rewards for each proposed block. Before the Merge, validators were responsible for both building and proposing, this resulted in only sophisticated institutions having access to MEV boosted opportunities.
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3
Improving Network Capabilities
Builders will play a crucial role in future developments for the Ethereum ecosystem. Efficient block creation and transaction ordering alleviate network congestion, leading to a smoother experience for participants on Ethereum.
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4
Embrace Decentralization
By separating the builder and proposer of a block, it is far less likely a validator will be able to censor transactions.
Frequently Asked Questions
Does BTCS Inc. operate Ethereum validators?
Yes, BTCS Inc. has been actively validating transactions on the Ethereum blockchain since 2021 and according to our latest 10-Q report, operates 240 validator nodes.
Does BTCS Inc. operate as a searcher?
No, we only use bundles to build competitive blocks. We do not perform any type of MEV strategies such as arbitrage.
What’s the difference between a validator and a builder?
This is commonly referred to as Proposer-Builder Separation (PBS). The responsibility of the validator is to secure the network and broadcast blocks to other nodes. If a validator wants to maximize their revenue, they sell their blockspace to the highest bidding builder. A builder’s job is to sequence different transactions in a block that maximizes the fees collected and MEV.
How does a validator get chosen to propose the next block?
Validators are chosen at random to propose the next block.
How does a builder get their block chosen by a validator?
Builders will pay a fee to the validator that has been chosen to propose the next block. The validator will simply accept the block from the builder that paid the highest fee.
Which relays does Builder+ by BTCS submit blocks to?
Builder+ by BTCS only submits blocks to OFAC filtered relays. The relays that BTCS Builder sends blocks to are: Relay1, Relay2, Relay 3…
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