I assume that agents are not monopolizing private tx orderflow, since the text does not discuss this scenario. Then, starting from a base model of collusion, I am interested in your comments on the following:
- Monitor – Cartel members will have no way of knowing if a member has violated the agreement when someone places a bid just above v at the last moment of the auction.
- Control – There is no fixed supply of seats at the bidding table, and entering is profitable when a cartel fixes the price at v.
I also add the following points to consider:
- If the auction is APS burn, the beacon proposer will at least ensure that the price corresponds to available priority fees, or otherwise self-build. We can assume that v must correspond to easily attainable MEV.
- There is a wide variety of burn incentives under APS burn. Particularly, staking service providers will wish to ensure that competitors do not attain more rewards than them, so that they can win the overarching staking metagame. This can be achieved by integrating with builders to bid away competing beacon proposers’ profit margins at the attester observation deadline.