The Waiting Room: What Secured Lending Predicts About MEV

Reflections from DevConnect 2025: from the stone streets of Buenos Aires to the digital trenches of Ethereum.

The Stone City

Buenos Aires taught me what Ethereum couldn't: durable architecture survives when it serves users, not extractors. I walked stone streets designed for humans, not cars, past open plazas breathing despite 200% inflation.

I arrived at DevConnect 2025 on a whim. A Friday whisper from a friend who knew I wanted to see how this actually worked. Sunday landing, wallet prepped with dormant ETH bought years ago. I'd ignored it, waiting for "steak money." But once you have been on the wrong side of a system like this, you stop trusting shiny ones.

You dig beneath surfaces.

DevConnect Awakening

Buenos Aires ran on-chain. Tap phone, instant verifiable trust: no paper, no interpretation. You can't print ETH. You have to earn it, buy it, or build for it. Every movement is recorded on a shared ledger instead of a private spreadsheet.

These were the same agreements I'd managed in my previous life: SBA loans, mortgages, car notes, cellphone EULAs. Documentation was the original chain before blockchains. More documents meant more proof, but also more room for interpretation, and interpretation is where the discretion lived. I had seen how much interpretation those records could absorb once the reading went against the borrower.

Could immutable contracts finally remove the discretion?

MEV answered in six hours. Same pattern, mempool edition.

The mempool isn't a waiting room. It's a hunting ground. A field of sitting ducks who show up ready to play by the rules, only to realize the mechanics run behind the scenes to siphon profits along the way.

Three Pillars

Secured lending taught me what extraction looks like from the borrower's side. It has three distinct pillars, and Ethereum is rebuilding them pixel-perfect:

1. Consolidated visibility. Your performance data becomes the public mempool.
2. Asymmetric ordering. The lender "qualifies" you; the validator builds the blocks.
3. Weaponized middleware. Liquidation servicing becomes MEV-Boost relays.

MEV recreates the handshake in the shadows, digitally. Users broadcast trades to a public mempool. Searchers spot the swaps. They bundle bribes to builders, who pass them to relays, who pass them to proposers.

Retail users lose a measurable share of trade value this way, and validators gain a meaningful yield uplift. Neutral infrastructure has become a digital good old boys club.

ePBS: Plywood Over Stone

Enshrined Proposer-Builder Separation promises progress, but to my eyes it merely enshrines the extraction. It formalizes the handshakes. Searcher bundles persist, and bribes become protocol canon. Inclusion lists might force a transaction through the door, but they don't stop the predators from standing at the threshold.

It's the same move as reforming loan documentation without changing who controls the file.

The Encryption Trap

The current chatter is all about encrypted mempools, cloaking transactions so hunters can't see the meat in the wheelbarrow. But in traditional finance I learned that you don't need to see the contents of a file to know it's a target. You just watch the timing, the source, and the weight.

Encryption is a digital mask. It doesn't dissolve the waiting room. As long as users are forced to sit in a public lobby before they reach the blockchain, the game is rigged. Hunters don't need your face. They just need to know you're in the room.

Moving Beyond the Waiting Room

Blockchain escapes this pattern only when we stop trying to hide the waiting room and start dismantling it. We need a chain of trust that handles the user with the internalized settlement of a private vault, not a glass lobby.

• ZK proofs as stone carvings. Undeniable execution that renders ordering games moot.
• Direct-to-proposer paths. Removing the middleman builders who charge a toll for the air we breathe.
• Protocol-enforced fairness. Replacing the bribe-to-win auction with a system where position is a right, not a purchase.

I recognise the tension. Proposer-builder separation exists because without it, smaller validators cannot compete at block building and the network centralizes anyway. Any proposal that removes builders has to answer that, and this one is a direction rather than a finished mechanism.

MEV proves that humans will always rebuild extraction layers unless we enforce end-to-end integrity.

Transparency vs. The Bottom Line

We must ask who benefits from the waiting room remaining dark.

In lending, the borrower's lack of visibility benefits the lender. On Ethereum, the same is true for the largest validator pools. Entities that now run a significant percentage of the network's infrastructure earn real revenue from these tips. For a public company, MEV isn't a technical quirk. It's a line item on a quarterly earnings report.

When extraction is obscured, it fuels a centralization loop. Large providers offer higher yields because they have the best hunters and the deepest bribes. That makes their staking products more attractive, drawing in more ETH, and further centralizing the network.

From Bribes to Protocol Fees

Pushback against fixing the waiting room usually hides behind market efficiency. But true efficiency doesn't require shadows.

Move toward transparent protocol fees, where extraction is either burned for the benefit of all ETH holders or returned to the user, and the informational advantage disappears. Large players would still be profitable. They would have to compete on the quality of their service rather than the depth of their shadows.

We don't need a system that thrives on blind signing and middleware bribes. We need an architecture where earnings are a function of integrity, not an exploitation of the sitting ducks.

The Pattern Every Founder Needs

I went to DevConnect looking for solutions. I found the same extraction thriving in blockspace auctions.

The lesson: neutral infrastructure always becomes a hunting ground.

• Qualification pools map to mempool sandwiches.
• Qualification blindspots map to relay trust assumptions.
• Adverse change declarations map to inclusion list bandaids.

Direct experience is a diagnostic instrument. Once you have seen the structure, you see the blueprint everywhere. Moving the system on-chain didn't remove the predators. It gave them better dashboards.

Researchers: Audit Like Argentina

To the researchers in this space: audit your infrastructure the way Buenos Aires audits plazas.

Does it serve humans or extractors?

The pattern returned because we let "neutral" middleware control the order of our lives. Stone plazas survived because citizens governed walkability. Ethereum survives centralization only when users govern blockspace.

Permissionless verification breaks the pattern permanently. Publish mempool dashboards. I'll publish my SBA file. Together we build cathedrals, not casinos.

Research Note

This essay is the basis for a six-week research plan. Flashbots FRP intake is currently paused, so this is not a live submission. I am carrying the work forward in the meantime and publishing the artifacts openly, so that a proposal can go in complete when intake reopens. It focuses on three questions:

• How large are retail sandwich-style losses on Ethereum, and how do they map to adverse change patterns in lending qualification pools?
• Where do current ePBS and encrypted-mempool designs still concentrate visibility and ordering power?
• Can a plaza-style inclusion and fee mechanism preserve validator economics while reducing predatory MEV in common user flows?

Deliverables: a research report of 5,000 to 7,000 words, a waiting room vulnerability taxonomy separating visibility-derived from ordering-derived exposure, concrete transparent protocol fee alternatives, and open analysis artifacts (datasets and notebooks) so others can stress-test the findings.

About the Author

Dilia Wood is a commercial real estate developer specializing in historic preservation, and an SBA borrower. She is the original developer of the 1924 O.S. Stapley Hardware Store adaptive reuse at 63 East Boston Street, Chandler, Arizona, which she owned and operated as Inspirador from 2006 to 2013. She was approved for an SBA loan on a $2.6 million project as a start-up, and kept the complete file, including the lender and CDC records. She now documents the full arc of an SBA loan, 7(a) and 504, from the borrower's side. She takes no lender compensation, and writes for small business owners who will sign personally.