Private Transactions Surge on Ethereum, Dominating Gas Fees

A recent Blocknative analysis reveals that private transactions are becoming dominant on the Ethereum network. Users are increasingly choosing to route transactions privately to avoid front-running bots, which exploit pending trades for profit.

Although private transactions make up about 30% of all Ethereum transactions, they account for over half of the network’s total gas fees.

Since March, the prevalence of dark pool transactions—executed privately through agreements with validators—has risen, shifting the dynamics of transaction processing and gas fees. These transactions bypass public mempools, where front-running bots typically operate, by going directly to block proposers.

Private transactions, often used for complex actions like swaps, consume more gas due to their nature. The Blocknative report highlights that a few key blockbuilders, including Titan, Beaver, Flashbots, and Rsync, have seen significant increases in their private transaction volumes, particularly following the Dencun hard fork.

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The rise in dark pool transactions has raised concerns about centralization and volatility. The report notes that the dominance of private transactions can lead to unpredictable gas fees and reduce transparency in transaction costs, as public mempools become less observable. This lack of visibility can result in either excessively high or low transaction fees, affecting the reliability of transaction processing.

Deyan Angelov

Active crypto trader who also follows news related to stocks, the S&P 500, and gold. Deyan enjoys staying physically active, trains regularly, and practices calisthenics. He also likes reading sci-fi books when he has the time.