Ethereum’s Beating Heart: The Relay — Generic Commodity or Unique Asset?

On September 15th, 2022, Ethereum made history with its transition to Proof of Stake, also known as The Merge. With it, came a completely new Ethereum product category: The Ethereum Relay.

Validators now use relays to outsource their block production to entities specialized in extracting extra revenue. Relays have become the essential layer between validators and block builders, which in turn cascades down impacting MEV searchers and even user transactions.

To the untrained eye, relays look like a generic commodity — a little like an oil pipeline delivering transactions to validators from the transaction pool. If this were true, it would make sense for validators to connect to just one relay with maybe a backup connection in case of failure; connecting to any more would be a waste of computing power.

The reality, however, is very different.

Multiple relays operate on Ethereum, each with their own unique traits, and their own strategy to generate value for their users. In this article we examine the key traits that differentiate relays, and examine the best data sources to examine, benchmark and compare them.

High Value Traits of Ethereum Relays: The 6 R’s

So what makes one relay more valuable than another? How should different stakeholders (validators, builders, searchers, users etc) approach breaking down, analyzing and finding the highest value relays for them?

When we remove all the technical jargon and complexity, it all comes down to the 6 R’s. We believe these pillars represent the value that relays should provide and strive to improve in order to maximize their value to ecosystem stakeholders:

• Reach — The amount of Ethereum validators connected to the relay
• Reward — The average reward the relay pays for each of its blocks
• Reliability — The likelihood a relay will perform its intended function satisfactorily within a defined environment for a specific time period. The two critical determining factors being uptime and latency
• Rarity — Does the relay contribute net new/unique blocks to its connected validators? Does the relay source transactions & bundles from a unique set of high performing searchers and/or builders?
• Reputation — An intangible trust assumption put on the relay that it will not act maliciously. This will be a mix of multiple variables including: Has this relay ever acted maliciously in the past? How long has this relay operated? Do I trust the party running the relay? Is this team contributing to the ecosystem? e.g. bug reports, code contributions
• Range — depth of feature set such as OFAC compliance or cancelable bundles

When looking at the 6 R’s it’s important to acknowledge different stakeholders will prioritize their needs differently.

Some Simple Examples:

• Searchers may value reputation higher than a validator as they do not want their bundles to be stolen
• Validators may value rarity higher than a searcher as they do not want to waste computing power analyzing the same set of blocks from multiple relays
• Block builders may value reach higher than a validator as they want their blocks to reach as many validators as possible, increasing the likelihood their block is proposed and produced.

By defining and using the 6 R’s, we can see that an Ethereum Relay isn’t just a generic commodity but a product that should be carefully chosen and adopted by each stakeholder.

Measuring the 6 R’s

Now we have defined the key traits of a relay, the next step is to measure them. Luckily for us, since the start of the Ethereum PoS revolution, we have been blessed with a number of open source projects that break the on-chain data down visually. These sites provide stakeholders the basic tools needed to determine the best relays for them.

A Selection of the Best Resources:

Rated.network — Unique data and visualization of the block share each Ethereum relay has on each big validator set.

MEVPanda.com — 24h and 7d data on block count, average block rewards, block count, overall rewards and if the relays are delivering the ETH rewards promised from their proposed blocks.

It also is great to visualize the overall relay block market share.

Beaconcha.in/relays — Great source to monitor and compare block count, average block rewards, block count and overall rewards for 7d, 31d and 180d relay data.

mev-relays.beaconstate.info — Great source for monitoring Ethereum relay uptime.

MEVBoost.pics — Great source for iterative and interactive relay data.

Relay.ultrasound.money/#sanctions-censorship — Great source to check censorship and OFAC compliance for both the Relay and Builder level

Notable Mentions:

MevBoost.org — The OG that provides open source and ‘All time’ data for MEV-Boost relays and block builders.

Fees-monitoring.lido.fi — The official Lido dashboard that monitors Node Operators performance metrics such as proposed verses, missed blocks and any unknown fee recipients.

Relayscan.io — A good data source for builder performance / open source.

app.metrika.co/ethereum/dashboard/consensus-performance — relatively new entrant to consensus data market with a fantastic range of data breakdown including relay uptimes, block reward data, latency and much more.

A quick look at a handful of the above sources is all you need to see that not all relays are created equal. Some clearly excel at volume, others excel at block rewards. This is typical of a new product category being run at full steam by multiple talented teams. There is likely to be multiple winners here as having just one relay would be extremely bad for decentralization. However it does feel likely that the first teams that can crack the 6 R’s will end up with an advantageous position in the Ethereum relay market moving forward.

Not A Generic Commodity After All

In the last article we talked about how Ethereum’s migration to PoS completely re-architected the MEV value chain; the relay layer is a lesser known, yet still a key part of it. The battle between different Ethereum relays has only just begun, with plenty of entrants in the mix vying to be a key part of a multi-billion dollar execution layer.

Consensus technology can sometimes be hard to predict when it comes to what the future looks like, but one thing is certain — with relays being such a fundamental aspect of every single Ethereum transaction and also being a nascent product category, we are likely to continue to see big innovations in how this key part of the transaction layer adds value to all its stakeholders.