Searcher validator interaction refers to the relationship and communication between “searchers,” who identify profitable transaction ordering opportunities (MEV), and “validators” (or block producers), who are responsible for including transactions in blocks. This interaction often involves off-chain bidding and private channels to convey transaction bundles. It influences how transactions are ordered and processed on a blockchain. This dynamic is central to MEV extraction.
Context
Searcher validator interaction is a critical aspect of the MEV ecosystem, influencing transaction finality and network decentralization. Concerns exist regarding potential centralization of block production if only a few entities control these interactions. Protocols are exploring various designs, such as proposer-builder separation, to mitigate negative consequences and promote fairer block construction.
A new auction mechanism for transaction bundling transforms MEV from an externality into a direct revenue stream, enhancing chain efficiency and validator incentive compatibility.
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