Thinking about the monopoly of Titan and Flashbots, the builders of the ETH zone: How does chain abstraction unlock development opportunities?

Author: Austin King, Co-founder and CEO of Omni Network

Compiled by: Felix, PANews

Few people know that only 2 companies create 90% of the Ethereum Block. However, even fewer people know the behind-the-scenes story that led to this monopoly.

Here are the untold stories of Titan, the hidden profits of over $40 million, and how blockchain abstraction will bring greater opportunities.

Beginning

It all started at the end of 2022, when Flashbots created MEV-Boost, which allows ETH Block L1 validators to obtain transaction Blocks from third parties (called Builders, specializing in MEV extraction), allowing validators to earn more money. After that, almost all ETH Block L1 validators quickly began running this software:

Refer to the following diagram, initially (#1) flashbots (in pink) was the only ‘Builder’ running, and six months later, fierce competition (#2) emerged. Now, there are only 2 important builders (#3): Beaver and Titan.

Obviously, a lot happened during this period, but one of the most influential events was in April 2023, when Titan reached an exclusive Order Flow (EOF) protocol agreement with Banana Gun - who later became a top-tier Telegram trading bot. After this EOF transaction, Titan had the opportunity to build Blocks for L1 validators that were more profitable than any other builders, as they had exclusive access to higher-reward transactions.

After that, over 90% of ETH L1 transactions came from two companies (Beaver and Titan).

What’s more interesting is the profit statistics data as of August this year:

flashbots

Created about 550,000 Blocks

Profit 16.7 ETH

Titan

Created about 600,000 Blocks

Profit 13,151 ETH

Based on today’s price, the difference is 44 million US dollars.

Although these are all public data, some interesting questions are still mysteries:

Why did Banana Gun choose to almost completely bundle its service routes to Titan when it occupies less than 1% of the market share?

Did Titan initially reach a multi-million dollar deal with the Banana Gun team to increase market share?

Does Titan promise to provide kickbacks to the Banana Gun team, thereby harming its users’ interests?

The specific situation is unknown, and few people may know this information.

As the co-founder and CEO of Omni Network, why does Austin King spend time delving into such transactions?

Because the chain abstraction will unlock greater profit opportunities. The current market is rapidly shifting towards focusing on user experience (users will not consider Gas, transaction submission, which on-chain transaction, etc.), the next wave of users will be far less “complex” than today’s encryption users. New users simply won’t care about how all of this happens, and this abstract downstream will have more opportunities, and each network can have a large source of income.

Nowadays, when the two core primitives of OMNI (EVM + Interop) are used, they will be destroyed. However, what few people understand is that there are business opportunities when the revenue opportunities of the order flow supply chain directly introduce the core model of Token.