How Do Private Transaction Relays, like Flashbots, Aim to Reduce MEV and Front-Running?

Private transaction relays allow users to submit transactions directly to block builders (miners/validators) without broadcasting them to the public mempool first. This prevents front-runners from seeing the pending transaction and executing a profitable trade before it.

The block builder can include the transaction directly in the block, ensuring the desired order of execution. This system aims to internalize the MEV profit for the block builder and the user, rather than a malicious actor.