The Future of Proposer-Builder Separation in Appchains

Without PBS, MEV extracted by validators is a pure tax on users, creating a $500M+ annual leakage from appchain ecosystems. This value should fund protocol development, not vanish into generalized validator pools.\n- Revenue Recapture: Redirects MEV to the appchain's treasury or stakers.\n- User Experience: Mitigates front-running and sandwich attacks on DEXs like Uniswap or PancakeSwap forks.

Appchains can outsource block production to a competitive market of specialized builders (e.g., Flashbots SUAVE, BloXroute). This turns block building into a commoditized service, decoupling execution from consensus.\n- Optimized Execution: Builders compete to provide the most valuable blocks, maximizing fees and MEV capture efficiency.\n- Protocol Agility: The appchain can upgrade its builder set without forking its consensus layer.

A monolithic validator-proposer is a single point of failure for OFAC compliance. Appchains for DeFi or privacy (e.g., dYdX, Aztec) require credible neutrality.\n- Regulatory Insulation: Separating the proposer (who orders blocks) from the builder (who constructs them) creates a censorship-resistant gateway.\n- Credible Commitment: The protocol can enforce inclusion lists or commit to MEV-Boost++-style architectures.

PBS enables a shift from transaction-based to intent-based architectures. Users submit desired outcomes (e.g., "swap X for Y at best price"), not explicit transactions.\n- Abstracted Complexity: Builders and solvers (like UniswapX or CowSwap) compete to fulfill intents optimally.\n- Cross-Chain Native: Intents can be fulfilled across domains via bridges like LayerZero or Axelar, making PBS critical for interoperability.

Appchain validators often face low and volatile fee rewards, leading to security budget shortfalls. Pure token inflation is unsustainable.\n- Fee Market Diversification: PBS creates a secondary fee market for block space, independent of base transaction fees.\n- Sustainable Security: Predictable builder payments supplement staking rewards, securing the chain against >33% attacks.

PBS won't be bolted on; it will be baked in. Expect native PBS rollups and shared builder networks (like EigenLayer and Espresso) to become standard infrastructure.\n- Composability: A shared builder market can serve multiple appchains, achieving economies of scale.\n- Modular Synergy: Cleanly integrates with data availability layers (Celestia, EigenDA) and shared sequencers.

Imposing Ethereum's PBS model on appchains adds unnecessary overhead. The core issue isn't just MEV extraction, but optimizing for predictable, high-frequency state transitions like AMM swaps or orderbook matching. Generic builders waste cycles on irrelevant computations.

• Overhead Tax: Forces all transactions through a generic auction, adding ~100-200ms latency.
• State Blindness: Builders are generic and cannot pre-compute or optimize for the app's specific logic.
• Capital Inefficiency: Requires competing for block space in a general-purpose mempool.

Appchains can deploy builders that are hardcoded to their core state machine. Think a builder that only sequences swaps for a DEX chain, or orders for a Perp DEX. This mirrors the intent-based architecture of UniswapX and CowSwap but at the consensus layer.

• Pre-Execution: Builders can pre-compute optimal swap routes or order matching off-chain.
• Guaranteed Finality: Proposer simply attests to the builder's optimized block, slashing for incorrect state transitions.
• Throughput Leap: Enables ~10k TPS for the app's primary function by removing generic validation.

In small appchain ecosystems, the same entity often runs the proposer and the dominant builder, recreating the centralization PBS was meant to solve. This is a critical flaw in Cosmos SDK or Polygon CDK chains with few validators.

• Trust Assumption: Relies on validator honesty not to collude with their captive builder.
• MEV Re-Centralization: Creates a single point for extracting maximum value from users.
• Staking Security Risk: Reduces incentive for decentralized validator set if profits are captured off-chain.

Bake PBS directly into the chain's protocol with a commit-reveal scheme and a verifiable delay function (VDF). Inspired by Ethereum's research, this forces a time gap between block building and proposing, allowing competing builders to challenge malicious blocks. This is the appchain-native answer to mev-boost.

• Decoupling by Design: Proposer cannot see builder identity or block content until after commitment.
• Slashing for Censorship: Protocol can slash proposers that exclude valid, fee-paying bundles.
• Credible Neutrality: Ensures the chain's economic rules are enforced, not gamed.

Appchain-native PBS creates isolated MEV markets. An arb opportunity between a DEX on Chain A and a lending market on Chain B cannot be captured by a chain-specific builder. This fragments liquidity and leaves value on the table, a problem LayerZero and Axelar solve for messages but not for coordinated execution.

• Inefficient Markets: Limits MEV capture to single-chain scope, reducing searcher competition and user savings.
• Bridge Vulnerability: Forces complex, risky multi-chain transactions instead of atomic cross-chain bundles.
• Capital Lockup: Requires capital deployed on each chain separately.

A new class of infrastructure that coordinates specialized builders across appchains. Think Across Protocol's architecture applied to block building. An aggregator receives a cross-chain intent, splits it into chain-specific sub-bundles, routes them to the optimal native builder on each chain, and guarantees atomicity.

• Unified Liquidity: Creates a single market for cross-chain MEV, improving price competition.
• Atomic Guarantees: Uses cryptographic attestations or smart contracts to make execution atomic or revert all.
• Builder Specialization: Leverages the best native builder for each chain's state transitions.

Appchain validators running their own builders creates a centralized, extractive point of failure. This undermines the chain's neutrality and opens the door to censorship and value leakage to a single entity.

• Key Benefit 1: Decouples block production from validation, preventing validator cartels.
• Key Benefit 2: Creates a competitive market for block space, improving user execution (e.g., better swap prices via Jito, Flashbots).

Outsourcing the builder network to a shared, opt-in sequencer layer. This provides instant PBS without the multi-year R&D overhead of a full Ethereum-style PBS rollout.

• Key Benefit 1: Fast time-to-market with ~500ms block times and built-in interoperability.
• Key Benefit 2: Retains sovereignty; the appchain's validators still control finality and slashing, unlike a shared sequencer rollup.

Baking PBS directly into the appchain's protocol, similar to Ethereum's danksharding roadmap. This is the gold standard for preventing validator/builder collusion and ensuring long-term, permissionless block building.

• Key Benefit 1: Protocol-level guarantees of builder competition and proposer commitments.
• Key Benefit 2: Enables advanced features like native account abstraction bundles and intent-based transaction flows from day one.

A neutral, competitive builder network is prerequisite for trust-minimized cross-chain communication. Builders can act as witnesses or relayers for protocols like LayerZero or Axelar, turning a cost center into a security asset.

• Key Benefit 1: Reduces bridging latency from minutes to seconds by leveraging fast block production.
• Key Benefit 2: Creates a new staking yield source for builders, aligning economic security with cross-chain activity.

PBS shifts the primary auction from users bidding for inclusion (gas wars) to builders bidding for the right to build the most valuable block. This leads to more efficient price discovery and potentially lower net costs for end-users.

• Key Benefit 1: Eliminates frontrunning as a dominant strategy, improving UX for DeFi apps like Uniswap.
• Key Benefit 2: Captures and redistributes MEV back to the chain's stakers/protocol treasury via proposer payments.

Expect a fragmented builder landscape: GPU-optimized builders for AI inference, privacy-focused builders for dark pools, and arbitrage-specialized builders. Appchains must design for this heterogeneity from the start.

• Key Benefit 1: Enables vertical-specific optimization (e.g., a gaming chain with a builder optimized for fast state proofs).
• Key Benefit 2: Drives innovation in execution environments beyond the EVM, benefiting Move or CosmWasm-based chains.