Who Wins Ethereum Block Building Auctions and Why?

The paper argues that Ethereum's block builder market is concentrated because builders need differentiated order flow to earn profits, yet they only receive such flow once they already hold significant market share. The authors note that MEV-Boost auctions produce about 90% of Ethereum blocks and that only three builders produced 80% of them between October 2023 and March 2024. Based on a six-month empirical analysis of MEV-Boost auctions, they report that market share correlates positively 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.