A recent report from Blocknative found that private transactions are becoming increasingly common on the Ethereum network.

As of August 20, private transactions account for around 30% of Ethereum’s order flow, but are responsible for more than half of the total gas consumption on the network.

Private transactions are processed through “dark pools,” where trades are sent directly to validators instead of entering the public transaction queue.

This method helps protect users from being front-run by automated trading bots. This practice is known as Maximum Extractable Value (MEV) and can exploit transaction data for profit.

Despite the security benefits, private transactions are more gas intensive, resulting in higher overall gas consumption. The report mentions that a few companies such as Beaver, Titan, Rsync, and Flashbots dominate private transactions. Since March, their gas consumption has increased by 130 to 150 percent.

This trend affects users who rely on public transactions. As private transactions take up a large portion of the block storage, gas prices for public transactions become less predictable. This can lead to transactions either getting stuck due to prices being too low or paying too much to ensure timely inclusion in the blockchain.

Overall, while private transactions provide protection against MEV, they introduce new challenges for users in the public queue and impact Ethereum’s overall gas market dynamics.

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