Why Use a Private Mempool

There are two structural mechanisms through which transaction originators lose value on Ethereum:

1. MEV: Routing transactions to the public mempool transforms transactions into exploitable signals, meaning value is extracted by adversarial third parties before inclusion. This leads to:

   • Front-running
   • Back-running
   • Sandwich attacks
   • Increased slippage
   • Strategic manipulation
2. Given lack of information, transaction originators commonly guess the price of blockspace. This leads to two forms of loss:

   • Overpayment: unnecessary transfer of surplus to validators/builders
   • Underpayment: delayed inclusion, failed execution, or opportunity loss

In both cases, execution uncertainty destroys value.