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Documents authored by Thiery, Thomas

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}
}
Document
DOI: 10.4230/LIPIcs.AFT.2023.30
Time Is Money: Strategic Timing Games in Proof-Of-Stake Protocols

Authors: Caspar Schwarz-Schilling, Fahad Saleh, Thomas Thiery, Jennifer Pan, Nihar Shah, and Barnabé Monnot

Published in: LIPIcs, Volume 282, 5th Conference on Advances in Financial Technologies (AFT 2023)

Abstract
We propose a model suggesting that rational consensus participants may play timing games, and strategically delay their block proposal to optimize MEV capture, while still ensuring the proposal’s inclusion in the canonical chain. In this context, ensuring economic fairness among consensus participants is critical to preserving decentralization. We contend that a model grounded in rational consensus participation provides a more accurate portrayal of behavior in economically incentivized systems such as blockchain protocols. We empirically investigate timing games on the Ethereum network and demonstrate that while timing games are worth playing, they are not currently being exploited by consensus participants. By quantifying the marginal value of time, we uncover strong evidence pointing towards their future potential, despite the limited exploitation of MEV capture observed at present.
Cite as

Caspar Schwarz-Schilling, Fahad Saleh, Thomas Thiery, Jennifer Pan, Nihar Shah, and Barnabé Monnot. Time Is Money: Strategic Timing Games in Proof-Of-Stake Protocols. In 5th Conference on Advances in Financial Technologies (AFT 2023). Leibniz International Proceedings in Informatics (LIPIcs), Volume 282, pp. 30:1-30:17, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2023)

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@InProceedings{schwarzschilling_et_al:LIPIcs.AFT.2023.30,
  author =	{Schwarz-Schilling, Caspar and Saleh, Fahad and Thiery, Thomas and Pan, Jennifer and Shah, Nihar and Monnot, Barnab\'{e}},
  title =	{{Time Is Money: Strategic Timing Games in Proof-Of-Stake Protocols}},
  booktitle =	{5th Conference on Advances in Financial Technologies (AFT 2023)},
  pages =	{30:1--30:17},
  series =	{Leibniz International Proceedings in Informatics (LIPIcs)},
  ISBN =	{978-3-95977-303-4},
  ISSN =	{1868-8969},
  year =	{2023},
  volume =	{282},
  editor =	{Bonneau, Joseph and Weinberg, S. Matthew},
  publisher =	{Schloss Dagstuhl -- Leibniz-Zentrum f{\"u}r Informatik},
  address =	{Dagstuhl, Germany},
  URL =		{https://drops.dagstuhl.de/entities/document/10.4230/LIPIcs.AFT.2023.30},
  URN =		{urn:nbn:de:0030-drops-192193},
  doi =		{10.4230/LIPIcs.AFT.2023.30},
  annote =	{Keywords: blockchain, proof-of-stake, game theory, maximal extractable value}
}
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