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Documents authored by Öz, Burak

Document
DOI: 10.4230/LIPIcs.AFT.2026.20
Just-In-Time Resale in an Ahead-Of-Time Auction for Faster Execution

Authors: Burak Öz, Akaki Mamageishvili, Christoph Schlegel, and Ali Taslimi

Published in: LIPIcs, Volume 395, 8th Conference on Advances in Financial Technologies (AFT 2026)

Abstract
We study Arbitrum’s Timeboost auction, an ahead-of-time mechanism that sells a 200 ms ordering advantage in an otherwise first-come, first-served transaction ordering policy. The market naturally divides into two phases: a competition phase, in which the dominant searchers compete directly in the primary auction, and a coordination phase, in which they source fast-lane access through Kairos, a Just-in-Time resale intermediary. We use auction bids, time-boosted transactions, and on-chain payment traces to study how well ahead-of-time bids predict realized CEX-DEX arbitrage profits and how the emergence of resale changes surplus allocation. We find that ahead-of-time bids are noisy predictors of short-horizon arbitrage profits. During the competition phase, bid-profit correlations are statistically significant but economically modest at the round level, while correlations increase when profits are aggregated over longer horizons. This suggests that bidders can identify favorable market conditions but face substantial uncertainty about the realized value of any individual one-minute fast-lane interval. After the Kairos transition, competition in the primary auction weakens sharply: in our focused transition-analysis window, paid bids fall from 62.7% of the top bid before the transition to 14.8% thereafter, while total searcher profits remain broadly similar. The resulting dynamics are most consistent with coordination through a common intermediary rather than direct competition in the primary auction. More broadly, our findings suggest that ahead-of-time allocation mechanisms can be vulnerable to secondary-market intermediation when competition among dominant participants is weak.
Cite as

Burak Öz, Akaki Mamageishvili, Christoph Schlegel, and Ali Taslimi. Just-In-Time Resale in an Ahead-Of-Time Auction for Faster Execution. In 8th Conference on Advances in Financial Technologies (AFT 2026). Leibniz International Proceedings in Informatics (LIPIcs), Volume 395, pp. 20:1-20:23, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2026)

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@InProceedings{oz_et_al:LIPIcs.AFT.2026.20,
  author =	{\"{O}z, Burak and Mamageishvili, Akaki and Schlegel, Christoph and Taslimi, Ali},
  title =	{{Just-In-Time Resale in an Ahead-Of-Time Auction for Faster Execution}},
  booktitle =	{8th Conference on Advances in Financial Technologies (AFT 2026)},
  pages =	{20:1--20:23},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-451-2},
  ISSN =	{1868-8969},
  year =	{2026},
  volume =	{395},
  editor =	{Kiayias, Aggelos and Kyropoulou, Maria},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2026.20},
  URN =		{urn:nbn:de:0030-drops-278740},
  doi =		{10.4230/LIPIcs.AFT.2026.20},
  annote =	{Keywords: ahead-of-time auctions, secondary markets, Timeboost, arbitrage}
}
Document
DOI: 10.4230/LIPIcs.AFT.2026.24
To Wait or to Probe: Arbitrage Competition on High-Throughput Blockchains

Authors: Fei Wu and Burak Öz

Published in: LIPIcs, Volume 395, 8th Conference on Advances in Financial Technologies (AFT 2026)

Abstract
Maximal Extractable Value (MEV) on high-throughput blockchains can be captured through targeted search, where bots identify opportunities off-chain and submit route-committed transactions, or through probabilistic search, where bots submit repeated attempts that discover opportunities during on-chain execution. This distinction has direct implications for spam, blockspace consumption, and protocol revenue. We model how ordering granularity, fee floors, and opportunity-access shocks shape competition between these architectures. Using cyclic arbitrage data on Base from June 2025 to February 2026, we develop a trace-level classifier for search architectures and show that the resulting labels correspond to distinct execution behavior. In our sample, probabilistic search accounts for only 23% of arbitrage activity but produces 95% of spam and consumes 20% of Base gas. We test the model across three episodes: Flashblocks selects against broad on-chain probabilistic scanners; token-launch opportunity shocks temporarily revive probabilistic search; and higher fee floors select against probabilistic bots whose opportunity flow cannot sustain repeated attempts. After Base’s configuration changes, protocol revenue shifts toward successful arbitrages and away from spam, probabilistic bots pay higher priority fees, and spam consumes a smaller share of blockspace.
Cite as

Fei Wu and Burak Öz. To Wait or to Probe: Arbitrage Competition on High-Throughput Blockchains. In 8th Conference on Advances in Financial Technologies (AFT 2026). Leibniz International Proceedings in Informatics (LIPIcs), Volume 395, pp. 24:1-24:24, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2026)

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@InProceedings{wu_et_al:LIPIcs.AFT.2026.24,
  author =	{Wu, Fei and \"{O}z, Burak},
  title =	{{To Wait or to Probe: Arbitrage Competition on High-Throughput Blockchains}},
  booktitle =	{8th Conference on Advances in Financial Technologies (AFT 2026)},
  pages =	{24:1--24:24},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-451-2},
  ISSN =	{1868-8969},
  year =	{2026},
  volume =	{395},
  editor =	{Kiayias, Aggelos and Kyropoulou, Maria},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2026.24},
  URN =		{urn:nbn:de:0030-drops-278788},
  doi =		{10.4230/LIPIcs.AFT.2026.24},
  annote =	{Keywords: Maximal Extractable Value, cyclic arbitrage, spam, Base}
}
Document
DOI: 10.4230/LIPIcs.AFT.2026.25
The Price of Decentralization in Block Building

Authors: Burak Öz, Fei Wu, Luis Correia, Sen Yang, Bruno Mazorra, and Stefanos Leonardos

Published in: LIPIcs, Volume 395, 8th Conference on Advances in Financial Technologies (AFT 2026)

Abstract
Decentralized block building mechanisms replace the monopoly of a single proposer with multiple builders. However, their censorship-resistance and fair-access benefits depend not only on the number of builders, but also on where builders are geographically positioned to provide transaction coverage. We study this tension between builder location choice, user transaction coverage, and utility concentration by modeling decentralized block building as a stochastic coverage game. Builders choose regions, information sources emit transactions over a block construction round, and latency determines whether a transaction is received before the deadline. We show that the game is an exact potential game and admits a pure Nash equilibrium. We prove an asymptotically tight factor-2 bound on the Price of Anarchy, which we interpret as the price of decentralization from uncoordinated builder placement. We also study builder utility concentration, showing that the lowest-utility builder earns at least half of the highest-utility builder’s payoff, and the utility-share HHI is at most 12.5% above the egalitarian benchmark. We complement the theory with simulations under richer latency and source environments and show that slot times, builder participation, and reward-sharing rules are important protocol design choices that can shape the price of decentralization.
Cite as

Burak Öz, Fei Wu, Luis Correia, Sen Yang, Bruno Mazorra, and Stefanos Leonardos. The Price of Decentralization in Block Building. In 8th Conference on Advances in Financial Technologies (AFT 2026). Leibniz International Proceedings in Informatics (LIPIcs), Volume 395, pp. 25:1-25:24, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2026)

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@InProceedings{oz_et_al:LIPIcs.AFT.2026.25,
  author =	{\"{O}z, Burak and Wu, Fei and Correia, Luis and Yang, Sen and Mazorra, Bruno and Leonardos, Stefanos},
  title =	{{The Price of Decentralization in Block Building}},
  booktitle =	{8th Conference on Advances in Financial Technologies (AFT 2026)},
  pages =	{25:1--25:24},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-451-2},
  ISSN =	{1868-8969},
  year =	{2026},
  volume =	{395},
  editor =	{Kiayias, Aggelos and Kyropoulou, Maria},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2026.25},
  URN =		{urn:nbn:de:0030-drops-278791},
  doi =		{10.4230/LIPIcs.AFT.2026.25},
  annote =	{Keywords: decentralization, block building, potential game, price of anarchy}
}
Document
DOI: 10.4230/LIPIcs.AFT.2024.22
Who Wins Ethereum Block Building Auctions and Why?

Authors: Burak Öz, Danning Sui, Thomas Thiery, and Florian Matthes

Published in: LIPIcs, Volume 316, 6th Conference on Advances in Financial Technologies (AFT 2024)

Abstract
The MEV-Boost block auction contributes approximately 90% of all Ethereum blocks. Between October 2023 and March 2024, only three builders produced 80% of them, highlighting the concentration of power within the block builder market. To foster competition and preserve Ethereum’s decentralized ethos and censorship resistance properties, understanding the dominant players' competitive edges is essential. In this paper, we identify features that play a significant role in builders' ability to win blocks and earn profits by conducting a comprehensive empirical analysis of MEV-Boost auctions over a six-month period. We reveal that block market share positively correlates with order flow diversity, while profitability correlates with access to order flow from Exclusive Providers, such as integrated searchers and external providers with exclusivity deals. Additionally, we show a positive correlation between market share and profit margin among the top ten builders, with features such as exclusive signal, non-atomic arbitrages, and Telegram bot flow strongly correlating with both metrics. This highlights a "chicken-and-egg" problem where builders need differentiated order flow to profit, but only receive such flow if they have a significant market share. Overall, this work provides an in-depth analysis of the key features driving the builder market towards centralization and offers valuable insights for designing further iterations of Ethereum block auctions, preserving Ethereum’s censorship resistance properties.
Cite as

Burak Öz, Danning Sui, Thomas Thiery, and Florian Matthes. Who Wins Ethereum Block Building Auctions and Why?. In 6th Conference on Advances in Financial Technologies (AFT 2024). Leibniz International Proceedings in Informatics (LIPIcs), Volume 316, pp. 22:1-22:25, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2024)

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@InProceedings{oz_et_al:LIPIcs.AFT.2024.22,
  author =	{\"{O}z, Burak and Sui, Danning and Thiery, Thomas and Matthes, Florian},
  title =	{{Who Wins Ethereum Block Building Auctions and Why?}},
  booktitle =	{6th Conference on Advances in Financial Technologies (AFT 2024)},
  pages =	{22:1--22:25},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-345-4},
  ISSN =	{1868-8969},
  year =	{2024},
  volume =	{316},
  editor =	{B\"{o}hme, Rainer and Kiffer, Lucianna},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2024.22},
  URN =		{urn:nbn:de:0030-drops-209589},
  doi =		{10.4230/LIPIcs.AFT.2024.22},
  annote =	{Keywords: Block Building Auction, Proposer-Builder Separation, Maximal Extractable Value}
}

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