Why Decentralized Block Building Is Not a Feature, It's a Requirement

Today, ~90% of Ethereum blocks are built by a handful of entities. This concentration creates a single point of failure and enables censorship, front-running, and rent extraction.\n- Centralized Control: Builders can exclude transactions or entire protocols.\n- Economic Capture: $1B+ in annual MEV flows to a few players.

Proposer-Builder Separation (PBS) is the architectural fix, but its implementation must be trust-minimized. SUAVE (Single Unifying Auction for Value Expression) is the endgame: a decentralized mempool and block builder for all chains.\n- Decouples Power: Separates block proposing from building.\n- Unified Liquidity: Creates a cross-chain MEV market.

Without decentralized building, networks lose their core value proposition. OFAC compliance by dominant builders has already led to significant transaction censorship. Decentralization is the only credible anti-censorship guarantee.\n- Regulatory Attack Surface: Centralized builders are easy targets.\n- Protocol Neutrality: Builders must be permissionless and credibly neutral.

The future is a competitive marketplace of specialized builders (e.g., Flashbots SUAVE, BloXroute). Competition drives innovation in privacy (threshold encryption), efficiency (better bundles), and fairness (MEV smoothing).\n- Specialized Builders: Privacy-focused, arbitrage-optimized, etc.\n- Open Bidding: Transparent, auction-based block space allocation.

Decentralized building isn't just about ethics; it's about performance. A resilient, distributed network of builders reduces single-point failures, leading to more reliable and faster finality. Centralization is a latent reliability risk.\n- Redundancy: No single builder outage halts the chain.\n- Latency Optimization: Distributed nodes improve geographic coverage.

Rollups (Arbitrum, Optimism, zkSync) and app-chains (dYdX, Polygon CDK) multiply the attack surface. A shared, decentralized builder network like SUAVE is critical infrastructure, preventing MEV cartels from forming on each new chain.\n- Scale Security: Don't reinvent the wheel per chain.\n- Cross-Chain Arbitrage: Capture value in a unified, efficient market.

The dominant builder, Flashbots, controls ~90% of Ethereum blocks post-Merge. This creates a single point of censorship and MEV extraction.\n- Problem: Relayers can exclude transactions, enabling OFAC compliance and threatening credible neutrality.\n- Consequence: A $1B+ annual MEV market is dominated by a handful of searchers and builders, centralizing profits.

PBS was designed to separate block building from proposing, but builders centralized faster than proposers decentralized.\n- Problem: Builders require massive capital and data access, creating insurmountable economies of scale.\n- Reality: Top-tier builders like bloXroute and Titan operate proprietary order flows, replicating Wall Street's dark pools on-chain.

Flashbots' own answer to its centralization: a universal, decentralized block building layer. It separates the roles of expression, solving, and execution.\n- Solution: Creates a competitive marketplace for decentralized block builders and cross-chain MEV auctions.\n- Goal: Break the vertical integration of order flow, capital, and execution that defines today's centralized builders.

The next evolution: encrypting transaction content until blocks are committed to prevent frontrunning and builder centralization.\n- Solution: Protocols like Shutter Network use threshold encryption to create a fair ordering layer.\n- Impact: Neutralizes predatory MEV, reducing the advantage of centralized, high-speed builders and leveling the playing field.

Jito's $165M JTO airdrop to its MEV searcher and staker community was a capital injection for decentralization.\n- Tactic: Use token incentives to bootstrap a distributed network of block builders and searchers.\n- Result: Created a viable, profit-driven alternative to a single centralized entity controlling the MEV supply chain.

For L2s, centralized sequencers are the new builders. The requirement extends to decentralized sequencing via networks like Espresso and Astria.\n- Problem: A single sequencer is a trusted operator that can censor and extract MEV.\n- Solution: Shared sequencing layers that enable permissionless, rollup-agnostic block building, turning L2s into true execution layers.

Proposer-Builder Separation (PBS) without decentralized builders just shifts the monopoly. A handful of builders like Flashbots and bloXroute dominate, creating a new point of failure and censorship.\n- >80% of Ethereum blocks are built by a few entities.\n- Creates regulatory attack surface for transaction filtering.

The endgame is a competitive, open market for block space assembly. Protocols like SUAVE, Astria, and Espresso are creating shared sequencing and builder networks that commoditize the role.\n- Enables credibly neutral transaction ordering.\n- Unlocks cross-domain MEV and better execution for users.

For any L1 or L2 with meaningful value, running an in-house, decentralized builder is a core infrastructure requirement. Relying on external, centralized builders is a strategic liability.\n- Protects against chain-level censorship.\n- Captures and redistributes native MEV revenue ($100Ms+ annually).

The future is users expressing outcomes, not transactions. Decentralized builders are the execution layer for intent-centric systems like UniswapX, CowSwap, and Across.\n- Drastically improves UX (gasless, failed tx refunds).\n- Builders compete on execution quality, not just inclusion.

Measure your chain's resilience by the Nakamoto Coefficient of its builder set. If one entity can censor >33% of blocks, your chain is not credibly neutral.\n- Top 5 chains today fail this test.\n- Requires active builder set incentivization and open-source client diversity.

Look at the bridge/relayer market. Centralized relayers like LayerZero's Oracle/Relayer set or Wormhole's Guardians create trusted bottlenecks. Decentralized block building prevents this same flaw in the core settlement layer.\n- Avoids multi-billion dollar bridge hacks.\n- Eliminates operator cartel risk.