The ability to profit from choosing transaction order created an economy, and the infrastructure built around it has reshaped how blocks are produced.
The underlying opportunity
Whoever orders transactions can insert their own before or after others.
Which enables arbitrage, liquidation capture and sandwiching of trades.
The extractable value is substantial and measurable, and it comes largely from ordinary users.
The early period
Bots competed by bidding up transaction fees to be included first.
Which produced fee spikes and congestion affecting everyone.
The competition was wasteful, since only one bot captured each opportunity while all paid.
The auction model
Searchers submit bundles to builders, bidding for inclusion.
Which moved the competition off the public fee market.
This reduced congestion and formalised the extraction rather than eliminating it.
Separation of roles
Searchers identify opportunities, builders construct blocks, relays pass them to proposers.
Which separates the entity choosing content from the entity with consensus authority.
Proposers receive payment for accepting a builder's block.
Centralisation concerns
Block building has concentrated among a small number of builders.
Which is a documented and monitored concern.
Builders can censor transactions, and censorship rates have been tracked publicly.
User protection
Private transaction submission routes bypass the public mempool.
Which protects against sandwiching.
Several wallets now use these by default for swaps, which meaningfully reduces user losses.
Protocol-level responses
Encrypted mempools, threshold decryption and inclusion lists.
Which aim to prevent ordering based on transaction content.
These are active research and development areas rather than deployed solutions on most networks.
Redistribution
Some designs return extracted value to users or to the protocol.
Which is being explored at both application and protocol level.
Order flow auctions paying users for their transaction flow are the most developed approach.
For ordinary users
Using a wallet with private submission and setting sensible slippage limits addresses most of the exposure.
Censorship measurement
The proportion of blocks excluding certain transactions is tracked publicly.
Which followed sanctions designations affecting specific addresses.
Relays offering censorship-resistant options exist and are used by a minority of proposers.
Inclusion lists
Protocol mechanisms requiring proposers to include specified transactions.
Which addresses censorship structurally rather than relying on operator choice.
These are under development on several networks.
Cross-domain extraction
Opportunities spanning multiple chains or layers.
Which is harder to capture and is an active area of research.
Shared sequencing proposals interact directly with this question.
Application-level mitigation
Batch auctions, commit-reveal schemes and frequent batch clearing.
Which remove the ordering advantage within an application.
Several trading applications have adopted these with measurable effect on user execution.
Measuring the cost
Published research estimates the value extracted from users annually, and the figures are substantial.
Proposer economics
Payments from builders form a meaningful share of validator revenue.
Which affects staking returns and creates dependence on the auction infrastructure.
Networks have debated whether to formalise this at protocol level.
Relay trust
Relays sit between builders and proposers and must be trusted not to steal or leak block contents.
Which is a trust assumption in what is otherwise a trustless system.
Incidents involving relay behaviour have occurred and prompted design changes.
Searcher competition
Opportunities are contested by many participants with sophisticated infrastructure.
Which compresses margins and drives investment in latency.
The economics resemble high-frequency trading in conventional markets closely.
Backrunning versus sandwiching
Executing after a transaction to capture arbitrage differs from surrounding it to extract from the user.
Which is a meaningful ethical and practical distinction that discussion frequently collapses.
For users
Private submission, tight slippage settings and using aggregators that route protectively.
The unresolved question
Whether extraction can be eliminated or only redistributed.
Which is genuinely contested among researchers.
The current direction favours redistribution and protection at the application layer over elimination at the protocol layer.
The practical position
Most user exposure is avoidable with wallet settings that already exist.
Measurement and transparency
Extracted value, builder market share and censorship rates are all published by independent dashboards.
Which makes this one of the more scrutinised parts of the infrastructure.
The transparency exists because the underlying data is public, which is the property the whole system was built to provide.
The user-facing outcome
Wallets and aggregators have quietly absorbed most of the protective measures.
Which means ordinary users benefit without needing to understand any of it.
That is generally how infrastructure improvements reach people, and it is worth knowing what the defaults are actually doing.
An open question
Whether the block building market consolidates further or fragments as protocol-level changes take effect.
A last note
An economy formed around transaction ordering within a few years, complete with specialised roles, auctions and market concentration. That happened because the opportunity was always there and nobody had built the infrastructure to capture it efficiently.
Summary
Extraction was formalised rather than eliminated, and user-facing protection now arrives through wallet defaults.
Which is the practical outcome for anyone not building infrastructure.