Builder+ by BTCS is our newly developed Ethereum block builder which utilizes advanced algorithms to meticulously construct optimized blocks for on-chain validation designed to maximize validator earnings.
By strategically rearranging new transactions within a block 'building' blocks for proposals, Builder+ ensures efficient block confirmations, enhances validator performance by handpicking profitable proposed blocks, and enables smoother transaction processing, unlocking substantial additional MEV fee rewards opportunities.
Builder+ provides BTCS a path to scalable revenue on Ethereum’s blockchain with limited additional costs.
Searchers independently participate in the network and continuously monitor the public mempool to execute a variety of arbitrage strategies. Their primary objective is to identify opportunities to profit from strategically rearranging order flow and bundling certain transactions together. Searchers do not construct blocks; instead, they fulfill the role of notifying a builder regarding potential transaction bundles they desire to see included in the next block.
Relays are a critical component to the efficiency of the Ethereum transaction process by acting as a middleman between builders and validators, facilitating communication and block transmission. One essential aspect of the relay is that the validator remains unaware of the block’s contents until they sign and validate the transaction allowing for a secure method of communication between builders and validators.
Validators take on the important responsibility of proposing blocks for validation by the network of nodes and establishing consensus. When a validator is selected to propose a block, it evaluates potential blocks submitted by builders through relays, choosing the block offering the highest builder fee. After accepting the selected block, the validator proceeds to sign and broadcast it across the network. Once other validators acknowledge the block and confirm the validity of its contents, those transactions become confirmed and a permanent part of the blockchain.
Builders play a crucial role in the transaction process by aiming to maximize the profitability of each block. It achieves this by rearranging different transactions within the block and identifying the most profitable arrangement based on associated transaction fees. Various algorithms can be employed by builders to determine the optimal ordering and to set the portion of the transaction fee they retain. Once the builder identifies and constructs an optimal block, it then submits the potential block to a relay where a validator can view the new submission. Submitted blocks include information regarding the fee a builder is willing to pay the validator as an incentive to select and propose the block. Builders earn rewards by collecting the transaction fees from the optimal block they’ve constructed. The profit for builders arises from the difference between the total transaction fees in the block and the fee they pay to the validator for block inclusion.
When a user initiates a transaction, it’s initially sent to the mempool. The mempool functions as a temporary storage space or queue for pending transactions that are awaiting confirmation and inclusion in a block. Transactions waiting in the mempool are publicly accessible, meaning anyone can view the contents of these transactions before they are permanently recorded on the blockchain. Each transaction in the mempool also has an associated fee the user is willing to pay for the transaction to be included in a block and added to the blockchain.
“In a rapidly evolving Ethereum blockchain ecosystem, Builder+ empowers Ethereum validators to seize the future of transaction processing. It’s not just a block builder; it’s your gateway to maximizing rewards.”
How Builders add Value to Ethereum’s Blockchain
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Increases Validator Incentives
Builders boost validator incentives by simplifying the process of capturing MEV rewards associated with proposed blocks, making participation in the network more lucrative and competitive.
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Improves Network Capabilities
Builders enhance the network’s efficiency by optimizing block construction and transaction order, which may result in increased transaction throughput, alleviated network congestion, and improved overall performance.
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Enhances Decentralization
Builders promote decentralization by reducing the technical barriers for validators to maximize rewards, ensuring a broader and more diverse set of participants in the network, and reducing risks of censorship by separating the builder and proposer roles.
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Promotes Innovation
Builders are poised to foster innovation within the Ethereum ecosystem by expanding the MEV marketplace and streamlining MEV strategies. This empowers developers to focus on creating value-added applications and services, cultivating a culture of innovation throughout the network.
What is Maximal Extractable Value (MEV)?
MEV is a crucial concept in Ethereum blockchain economics. It represents the highest potential value that can be extracted during the block creation process on the Ethereum blockchain network, specifically through the strategic reordering of transactions within a block by builders. MEV is a measure of the potential profit that can be gained through builders and validators engaging in a competitive process to maximize their reward from fees generated by user transactions. The value derived from the MEV process is extracted by the following activities:
Why is BTCS Launching Builder+?
BTCS Inc. boasts a rich history in the blockchain landscape, with over a decade of experience since our establishment in 2014. Our deep-rooted expertise in the industry has empowered us to develop and support critical blockchain infrastructure for numerous blockchain networks.
A key component of our blockchain infrastructure strategy focuses on running Ethereum validators, however we’re poised to take it a step further. BTCS' Builder+ is a pivotal step forward, signifying our commitment to enhancing the Ethereum ecosystem while delivering substantial value to our shareholders.
Harness MEV Revenue
Builder+ is designed to capture a share of the MEV rewards generated by validators who choose to leverage our builder. This represents a substantial revenue opportunity
Empower Validators
BTCS's Builder+ fosters a mutually beneficial relationship with validators, empowering them to boost their network rewards earnings by proposing blocks crafted by our builder.
OFAC Compliance
By operating our own builder, we can ensure that validated transactions are free from Office of Foreign Assets Control (OFAC) Specially Designated Nationals (SDN) listed wallet addresses, reinforcing our commitment to compliance and trust in the blockchain industry.
Fuel Ethereum's Growth
At BTCS, our deep commitment to the Ethereum network propels us to contribute to its development and growth. Builder+ exemplifies our dedication to this cause.
High Scalability
Provided Builder+ gains Ethereum infrastructure's market share, we foresee the potential for scalable revenue growth with minimal additional costs from our role as a block builder.
Ethereum Blockchain Economics
Ethereum blockchain economics encompasses the mechanisms by which fees are generated and distributed among participants in the Ethereum blockchain network, particularly validators and builders. Below is an overview of how these economic dynamics work:
Frequently Asked Questions
Does BTCS Inc. operate Ethereum validators?
Yes, BTCS Inc. has been validating transactions on the Ethereum blockchain since 2021.
How does a validator get chosen to propose the next block?
On Ethereum’s blockchain, every 12 seconds, a validator is randomly selected to be the block proposer. In this short span, the chosen validator is tasked with creating and broadcasting a new block to the network.
The likelihood of a specific validator being chosen for a slot is inversely proportional to the total number of validators in the network. As the number of validators increases, an individual validator’s chances of selection decrease.
Does BTCS Inc. operate as a searcher?
No, we use bundles submitted by third party searchers to build competitive blocks. We do not perform any type of MEV strategies.
What are MEV Strategies?
MEV strategies are implemented by searchers and involve the execution of transactions, which are integrated into their transaction bundles. MEV strategies are typically created from decentralized finance and trading applications.