The Blockchain Execution Dilemma: Optimizing Revenue XOR Fair Ordering
For blockchain validators and protocol designers, this work provides a dynamic optimization framework to balance revenue and fairness, revealing the cost of fair ordering.
The paper addresses the tension between validator revenue and transaction order fairness in blockchains, proposing a genetic algorithm that increases validator profit by ~15% and accelerates congestion relief by up to 58%, while showing that strict fair ordering can reduce revenue by 50-60% during high congestion.
The successive generations of consensus algorithms have progressively shifted the performance bottleneck of blockchains to the execution layer. While recent works address this by parallelizing transaction execution, they often overlook the critical role of transaction sequencing. Historically, transaction ordering was left to validator discretion, a practice prone to Maximal Extractable Value (MEV) attacks, or rigid fair-ordering protocols that limit validator revenue. In this work, we address the tension between validator revenue and order fairness using a dynamic optimization framework. We introduce a blockchain-independent model for transaction sequencing in a continuous setting where block executions can overlap. Within this framework, we propose an anytime genetic algorithm that utilizes gas prices, object sets, and predicted execution times to optimize schedules. We evaluate our approach with real-world datasets from Sui and Ethereum, and demonstrate that our algorithm increases validator profit by approximately 15% and accelerates congestion relief by up to 58%. Furthermore, we quantify the impact of fair-ordering constraints, showing they can reduce validator revenue by 50% to 60% during periods of high congestion. We provide the first evidence that enforcing strict fair ordering effectively nullifies the advantages of advanced sequencing.