My assumption is that kickbacks from proposer to selected builder are inevitable. The proposer wants all the builders to privately submit so that some of what would’ve been the payload base fee floor is instead captured as proposer revenue. It’s very natural that proposers would provide kickbacks to selected builders to incentivize this structure.
Establishing a word for following response.
Base Fee Overbid: payload_base_fee - builders_extracted_value_from_block when payload_base_fee > builders_extracted_value_from_block
My point is that an “ultrasound builder” who wants to set a baseline payload base fee floor through overbidding would be risking a lot of their balance should they instead be selected. In fact, they could be selected in either two scenarios:
- They predicted wrong and are the most valuable bid, now they lose their base fee overbid to a burn
- A proposer attempting to create a private bid structure selects the public ultrasound builder to call their bluff, now the ultrasound builder lost their base fee overbid to a burn. Rational move in an infinite game with enough relevant information.
My intuition is that the base fee overbidding phenomenon wouldn’t last very long given a few aggressive private-favoring proposers. If the ultrasound builders wanted to remain resilient in the long term, they’d have to become relatively good at capturing MEV spikes. But again, the financial incentive for them to improve their operation is just incomparable to a selfish builder, so the scales are tipped in the selfish favor.