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Gas Fee Refunds

Introduction​

Searchers and private transaction API users are automatically eligible to receive gas fee refunds. If Flashbots can include a bundle on chain for a lower price, you are eligible to receive a refund.

Gas fee refunds do not change how bundles are executed and searchers do not need to make any changes to be eligible for them.

Where do refunds come from​

Gas fee refunds include both priority fees and coinbase transfers.

In an optimal case, searchers are refunded the difference between their bid and the bid of the next-best bundle or transaction targeting the same state. Ie. the refund effectively results in the searcher paying the second price. In practice, searchers will receive some fraction of this amount depending on how much profit the Flashbots builder makes.

Which bundles receive refunds​

Flashbots provides refunds for bundles in blocks landed by the Flashbots block builder. Whether a bundle receives a refund depends on a few factors that vary from block to block:

  • How much network congestion and competition there was
  • Whether the Flashbots builder made a profit and how much
  • How much the specific bundle contributed to the value of the block
  • If the bundle was sent directly to Flashbots, or shared with other block builders by the searcher

Note that transactions seen in the public mempool are excluded and bundles containing only public mempool transactions do not receive refunds.

How to maximize both refunds and speed​

Transactions which are sent directly to the Flashbots Builder via the Bundle Relay, and not multiplexed by the searcher to other block builders, are likely to receive higher refunds. This is because they increase the profit of the Flashbots builder which is used to provide refunds.

The Flashbots block builder does not land 100% of blocks. In order to land bundles in all blocks, searchers can ask Flashbots to share their bundles with other block builders in cases where the Flashbots builder does not win a block. Flashbots will automatically share with all specified builders on the searcher's behalf.

Smart multiplexing​

To share bundles with other builders, add the builders field to your eth_sendBundle request. The builders field accepts a list of strings which correspond to the "name" tags of registered builders.

All eth_sendBundle requests are shared with the Flashbots builder. They are multiplexed to other block builders at the end of the slot if the Flashbots builder determines it will not win that block.

For example:

{
  "jsonrpc": "2.0",
  "id": 1,
  "method": "eth_sendBundle",
  "params": [
    {
      "txs": ["0x123abc...", "0x456def..."],
      "blockNumber": "0xb63dcd",
      "minTimestamp": 0,
      "maxTimestamp": 1615920932
      "builders": ["builder0x69", "beaverbuild.org"]
    }
  ]
}

Searchers can also use mev_sendBundle to multiplex bundles if they prefer. Though this method is more complex and not necessary for gas fee refunds.

Note: Smart multiplexing has a 1% rate of false positives, meaning that in 1% of MEV-Boost blocks there is a risk that searcher bundles will not be landed.

Bundle stats for multiplexed bundles​

To view bundle stats on multiplexed eth_sendBundle requests, use the flashbots_getSbundleStats API. You will see a new "smart" field in the response to multiplexed eth_sendBundle which indicates that the sbundle stats endpoint should be used.

How are refunds calculated​

The Flashbots builder uses a refund rule to retroactively calculate refunds for all bundles landed in its blocks.

The refund rule aims to have bundles make the minimum net payment so that bidding optimally is as straight forward as possible. We do this by measuring the contribution of bundles above the other bundles the builder has received, and refunding as much of that as possible.

Bundles sent by the same signer will be treated as non-competitive.

The Flat Tax Rule​

Flat tax rule

Definition of the flat tax rule

Notice that if the block generates enough value after paying the proposer, everyone should be refunded their contribution, meaning everyone pays the minimum they need to pay to beat competition.

Identity constraint​

To avoid the rule being gamed by submitting bundles from multiple identities, we impose an additional constraint that no set of identities can receive in total more refunds than they contribute to the block.

Identity constraint

Definition of the identity constraint

Who receives refunds​

The refund recipient is the signer used on the eth_sendBundle, mev_sendBundle, or eth_sendPrivateTransaction request.

How to track refunds​

Refunds are tracked from a start date of July 8, 2024. Via an upcoming API, users will be able to:

  • View unclaimed refund amounts
  • Delegate refunds to an Ethereum account other than their signing key address.