Why Decentralized Block Builders Are an Ideological Mirage

Builder centralization is inevitable. A builder's profit is the MEV spread between the private mempool and the public chain. This requires real-time, centralized data processing and order flow aggregation that distributed nodes cannot match.

Decentralization adds latency, which kills revenue. The SUAVE vision of a decentralized mempool introduces consensus overhead. Every millisecond of delay in block construction erodes the arbitrage opportunities that fund the builder.

The market structure proves this. Today's dominant builders like Flashbots and Jito Labs are centralized entities. Their value is operational speed and exclusive order flow, not distributed fault tolerance.

Evidence: Over 90% of Ethereum blocks post-merge are built by five entities. The builder market is more centralized than the validator set it was designed to decentralize.

Decentralization is a cost center for block building. The auction mechanism for MEV bundles (e.g., Flashbots MEV-Boost) inherently favors the bidder with the most capital and lowest latency, creating a natural monopoly.

Coordination beats fragmentation. A decentralized network of builders (e.g., a theoretical SUAVE-like network) must share orderflow and split profits, which is less efficient than a single, integrated entity like Jito Labs or a vertically integrated validator.

The data proves centralization. Over 90% of Ethereum blocks post-Merge are built by five entities. The economic pressure to capture cross-domain MEV (e.g., between Ethereum and Solana via Wormhole) further consolidates power into specialized, capital-rich firms.

The ideological mirage is believing code can override capital. Protocols like Cosmos or EigenLayer attempt to decentralize via cryptoeconomic staking, but the execution layer's physical reality of data centers and fiber optics guarantees centralization at the builder tier.

Decentralization destroys extractable value. A decentralized builder network like SUAVE must split MEV profits across validators, reducing the maximum bid for block space. This creates a permanent economic disadvantage versus centralized builders like Flashbots who consolidate capital and data.

EigenLayer restakes the problem, not solves it. Restaking with EigenLayer provides cryptoeconomic security for a decentralized sequencer, but does not alter the core incentive misalignment. Validators will still route orders to the highest bidder, recreating centralized points of failure.

The ideological mirage is credible neutrality. Protocols like CowSwap and UniswapX promote this ideal, but their intent-based architectures still require a centralized solver or filler to execute, merely shifting, not eliminating, the trust assumption.

Evidence: Flashbots controls >80% of Ethereum MEV. No decentralized builder has captured meaningful market share because their bids are structurally lower, proving the market selects for efficiency over ideology.