GovernanceCrypto

Why searchers and builders like candle auctions (and why it matters for the builder market post-Glamsterdam)

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Based on a feed excerpt; full article content has not been acquired. Source evidence retrieved 02/11/2026, 13:13:26 UTC.

Briefings

This briefing analyzes a 2026 article proposing that open-bidding auctions with random deadlines and few participants yield higher profits than sealed-bid auctions, a dynamic observed in Ethereum's MEV ecosystem post-Glamsterdam. The article formalizes a 'pennying equilibrium' where bidders incrementally outbid each other until the auction ends, creating a quasi-lottery effect. It argues this equilibrium is robust without requiring explicit collusion, potentially explaining latency arms races in the MEV space. Key parameters include an exponentially distributed auction deadline (rate μ) and independent Poisson revision processes (rate λ) for bidders.

Key points

• The article conjectures that Ethereum builders maintain open-bid auctions to restrict outside bidding and per-missioning, citing higher bidder profits in one-shot auctions without coordination.
• The pennying equilibrium strategy involves bidders bidding the minimum opening bid (r) at revision opportunities, outbidding by exactly one tick (ε) if losing, and doing nothing if already winning or the highest bid equals their value (v).

Context

The analysis applies to the Ethereum MEV ecosystem post-Glamsterdam, where heterogeneous proposer behavior and location uncertainty create deadline uncertainty. This dynamic creates a quasi-lottery for fast bidders, making pennying an equilibrium outcome. The findings inform discussions on ePBS and sealed bidding strategies.

Limitations

The model assumes risk-neutral bidders with identical values and costless bid revisions, which are unrealistic assumptions. The evidence is limited to the article's theoretical model and conjectures, with no empirical data or causal claims supported by source evidence.

Generated by Bittrees-hosted qwen35-2b sha256:aaf42c8b7c3c on 02/11/2026, 13:33:32 UTC. Based on publisher-provided feed evidence; may not cover the full original article. Check the source for details.

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