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Encountered this type of transactions [Flashbot Private Transaction] for the first time while checking out the transactions from a sketchy account

From what I understood so far;

  • these transactions are not sent to the mempool but directly sent to the miners

what I do not understand;

  • Why anyone would use these transactions
  • how to initiate a transaction like this
  • what are the benefits in these transactions

references;

Flashbot Private Transaction

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You are correct, private transactions are sent directly to the miner, bypassing the public mempool.

There are a few very good reasons to go directly to the miner:

  • Protect yourself from frontrunning, general front-running bots and sandwich bots cant see and exploit your transaction for example.
  • Transactions that would fail are not mined. This means you no longer pay for failing transactions. This is also very useful for MEV searches as it helps minimise risk when running any stratgies that rely on a number of transactions being successful, as you can submit a transaction bundle to their RPC and if one of the tx fails in the bundle, none will be mined.

Another thing to note is that all Txs sent directly to the miner are marked as private by etherscan, even if they were also in the public mempool. For example, I send a transaction to the public mempool for a uniswap token swap. A sandwich bot might see my Tx, place it in their bundle with their own transactions before and after it (sandwiching mine) and submit it to the miner. My Tx would also now be marked as private on etherscan too, if the sanwich bot bundle was mined.

Its simple to send your txs to the miner, there are many services to do so but the most popular would be flashbots. They are an API you can use to build and send bundles. However, they also offer an RPC endpoint that you can simply add to your meta mask

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