Builders, or Market Makers 2.0? The Rise of Crypto's Hidden Giants
From $8.2M Weekend Sprints to $642.5M Private Empires: Inside 2024's Most Profitable Builder Strategies
Just as Wall Street's early market makers dominated finance by controlling ticker tapes and trading floors, a new power has emerged in crypto: block builders, the market makers 2.0. These digital architects don't just facilitate trades – they orchestrate the entire blockchain ballet, controlling both public execution and private order flows. Like their historical predecessors, they've mastered the art of turning infrastructure control into profit, but with unprecedented digital leverage.
In this new financial theater, builders wield power that would make traditional market makers envious: the ability to see, sequence, and profit from transaction flows while maintaining their essential role as network infrastructure providers. As our investigation of 2024's most astounding trends reveals, this fusion of public authority and private advantage has created opportunities – and concerns – that transform the very nature of market operations.
How did one builder turn market turbulence into millions? Beaverbuild, a major player in the builder space, emerged as the dominant force, capitalizing on the high transaction volume and inflated priority fees during the crisis. Beaverbuild achieved an impressive 52.7% market share, earning a substantial $8.2 million in just three days. A significant portion of this income originated from Jaredfromsubway.eth, an entity that consistently paid high priority fees to Beaverbuild, hinting at a potential partnership or preferential treatment.
But the story doesn't end there.
When does builder power cross ethical lines? BeaverBuild's $476K profit sprint revealed a contentious strategy: partnering with Jaredfromsubway to backrun BananaGun's transactions. Their shared calldata patterns exposed more than just technical prowess - it unveiled how builders could leverage their privileged position to peek at incoming trades. This 45-day case study ignited debates about the fine line between innovation and exploitation in block building's dual roles.
As market volatility peaked, another player stepped into the spotlight.
How does a builder transform market chaos into a $3.5M windfall? MEV Builder 0x3b, another builder who, like Beaverbuild, profited significantly during Black Monday, securing the second-highest builder rewards. MEV Builder 0x3b's success is attributed to its strategic integration within the searcher-builder network, illustrated in this Builder Reward by Bot dashboard. The builder capitalized on liquidations and arbitrage opportunities stemming from market volatility, receiving hefty miner tips from a specific bot. This case highlights how builders with sophisticated search capabilities and established bot networks can extract substantial value, particularly during times of market instability.
Yet these visible successes merely scratch the surface.
Would you believe 90% of builder wealth flows through invisible channels? Like traditional sleeve bidding's hidden auctions, modern builders have mastered the art of privacy - accumulating a stunning $642.5M since September 2023 through private order flows. While public markets showcase the visible dance of transactions, giants like Titan, BeaverBuild, and Rsync quietly dominate their private empires. This shadow economy exposes a paradox: in our "decentralized" future, the real power lies in what we can't see.
These block-building stories are just one chapter in a larger saga of MEV evolution. Curious how these builders rose to such dominance? Our searcher-builder integration series reveals the technical foundations that made these profits possible - from Yoink's masterful $2.65M in 59 blocks to the intricate dance of backrunning strategies.
Want to decode the full complexity of builder warfare? Dive into our bidding war analysis, where we dissect millions of bids to show how giants like Titan and BeaverBuild fine-tuned their timing down to the millisecond. Each series adds another layer to understanding 2024's most profound shift in MEV dynamics: the evolution from solo searchers to integrated builder empires.
In our next annual review posts, we will revisit some of the most prominent transactions we’ve seen during 2024.
You can also click this link or open https://bit.ly/hfdefi to download the free ebook Head First DeFi, Decoding the DNA of Crypto Transactions & Strategies.
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