Detecting private order flow leakage across builders

Develop a reliable detection mechanism for private order flow leakage across Ethereum MEV-Boost builders that can identify and produce verifiable evidence when private orders (transactions or bundles submitted outside the public mempool) received by one builder are leaked to another builder, including potential Sybil identities, without altering transaction execution or revealing private content. Such a mechanism should enable enforceable penalties or reputation systems for leakage and reduce reliance on trust-based, market-share gating of private order flows.

Background

In the Ethereum MEV-Boost ecosystem, private order flow providers (e.g., searchers, channels, and trading bots) share transactions directly with builders to avoid public mempool exposure, but lack of fair-exchange guarantees creates a trust imbalance. To protect themselves, providers often restrict access to builders with sufficient market share, creating barriers to entry and contributing to centralization.

The paper highlights that builders can leak received private orders to other builders (including Sybils) without facing effective penalties, exacerbating trust issues. The authors suggest that a reliable leakage detection mechanism—potentially via invisible, non-interfering watermarks—would enable enforceable penalties and broaden the design space for reputation and collateral systems, thereby improving decentralization.