The Centralization Ticking Bomb Inside MEV-Boost

Proposer-Builder Separation (PBS) outsources block production to specialized builders, but it concentrates power in a few dominant entities like Flashbots and bloXroute. This creates a builder cartel that controls transaction ordering and extractable value.

The centralization risk shifted from validators to builders, who now have the unilateral power to censor transactions. This is the Faustian bargain: we traded one form of centralization for a more opaque and commercially motivated one.

Evidence: Post-Merge, over 90% of Ethereum blocks are built via MEV-Boost. The top three builders consistently produce over 60% of blocks, creating systemic risk for network neutrality and resilience.

Relay centralization is the kill switch. The top three MEV-Boost relays control over 90% of post-merge blocks. If these entities collude or are forced to censor transactions, they can simply stop attesting to blocks, causing the chain to stall.

The failure is not slashing, it's stalling. Unlike a 51% attack that rewrites history, a liveness attack halts progress. Validators following the dominant relays will ignore non-relay blocks, creating a deadlock that manual intervention cannot easily resolve.

Flashbots' dominance is the primary vector. As the largest relay operator, Flashbots' SUAVE initiative creates a conflict of interest. Its strategy to internalize MEV flow could incentivize it to degrade the public relay, weaponizing its market position.

Evidence: During the OFAC sanctions era, compliant relays like Flashbots and BloXroute censored transactions, demonstrating centralized control. A coordinated takedown of these endpoints would immediately fracture consensus.

The market is rational. The centralization of block building in MEV-Boost is a temporary, self-correcting inefficiency. High builder profits attract new entrants like Flashbots SUAVE, which fragment market share and reduce reliance on a few dominant builders like bloXroute or Titan.

Validators hold ultimate power. They are not passive; they select the highest-paying, most reliable builder. If a builder like Manifold becomes dominant or malicious, validators will switch, creating a natural economic disincentive for abuse. This is a classic market for lemons problem that resolves itself.

Evidence: The builder market share is already fluid. Following the OFAC compliance debate, validators diversified away from builders enforcing censorship, demonstrating the system's incentive-driven resilience. The profit motive ensures no single point of failure persists.

Relay centralization is the failure mode. MEV-Boost outsources block building to a competitive market but final block validation to a handful of trusted relays. This creates a single point of censorship where a relay cartel can filter transactions, threatening Ethereum's credible neutrality.

The builder market is not the problem. The proliferation of builders like Flashbots SUAVE, bloXroute, and Titan proves competition works. The bottleneck is the trusted relay layer, which acts as a centralized gateway between builders and proposers.

Enshrined PBS solves the trust problem. Moving Proposer-Builder Separation (PBS) into the protocol, as defined in Ethereum's roadmap, eliminates the need for trusted relays. This enshrines the auction in consensus, making censorship a protocol-level violation.

Evidence: In Q1 2024, over 90% of Ethereum blocks used MEV-Boost, with just three relays (Flashbots, bloXroute, Ultra Sound) controlling over 80% of the market. This concentration is the antithesis of Ethereum's decentralized ethos.