The Future of PBS: Will Builders Become the New Miners?

Top builders like Flashbots and bloXroute are no longer just software providers. They are becoming full-stack infrastructure operators, controlling everything from relays and block-building algorithms to private orderflow and cross-chain messaging. This vertical stack creates insurmountable moats for new entrants.

• Key Benefit: Captures the entire MEV supply chain, from sourcing to execution.
• Key Benefit: Enables proprietary optimizations (e.g., MEV-Share, SUAVE) that commoditize other builders.

The era of pure software builders is over. Winning auctions now requires billions in staked ETH for credible commitment (crLists) and tens of millions in operational capital for cross-domain arbitrage and fast liquidity. This mirrors the capital-intensive evolution of Proof-of-Work mining.

• Key Benefit: Deep capital reserves enable builders to guarantee block inclusion and win top-of-block positions.
• Key Benefit: Allows for sophisticated cross-chain strategies via LayerZero and Axelar, turning latency into profit.

Economic pressure will drive consolidation into a few dominant builder cartels. These entities will operate like mining pools, aggregating block-building resources and orderflow to outcompete solo builders. Protocols like EigenLayer will enable restaking of builder trust networks, further centralizing power.

• Key Benefit: Cartels achieve economies of scale, reducing costs and increasing profitability.
• Key Benefit: Can enforce standardized rules (e.g., censorship resistance, fee structures) across the network, becoming de facto regulators.

The dominant builder, Flashbots SUAVE, and a handful of others like bloxroute and Titan, control >80% of Ethereum blocks. This centralization creates systemic risk and rent-seeking behavior.

• Risk: Single point of failure for censorship resistance.
• Tactic: Exclusive order flow deals with major DEXs like Uniswap and Curve.
• Outcome: MEV extraction becomes a formalized, institutional revenue stream.

Builders are integrating upwards into proposer roles (via mev-boost relays) and downwards into searcher/application layers, creating vertically-stacked cartels.

• Risk: Neutral, public block space becomes a private, pay-to-play marketplace.
• Example: A builder-owned relay prioritizing its own blocks.
• Consequence: Stakers become passive rent collectors, not active validators.

The endgame is enshrined PBS at the protocol level, moving the builder market on-chain to break cartel control. This is Ethereum's PBS 2.0 roadmap.

• Mechanism: In-protocol block auction with cryptographic commit-reveal.
• Benefit: Eliminates trusted relays, enables permissionless builder entry.
• Goal: Aligns builder incentives with chain liveness, not extractive efficiency.

Rollups like Arbitrum, Optimism, and zkSync often outsource block building to centralized sequencers, replicating the L1 cartel problem on L2.

• Risk: BaaS providers (e.g., Caldera, Conduit) become the de facto miners.
• Vulnerability: Single sequencer can censor or reorder transactions.
• Irony: L2s solve scalability but often regress on decentralization.

Applications are bypassing the builder market entirely via intent-based architectures. Users express desired outcomes, and solvers compete off-chain.

• Protocols: UniswapX, CowSwap, Across (via Across Orbits).
• Benefit: Shifts competition from block space to solver algorithms.
• Result: Better prices for users, reduced extractable MEV for builders.

Builder cartels actively comply with OFAC sanctions, creating a regulatory moat that excludes permissionless builders. This formalizes a two-tier block-building system.

• Mechanism: Relays like Flashbots, Bloxroute Max Profit, and Titan censor OFAC-listed transactions.
• Outcome: >50% of Ethereum blocks are compliant, creating de facto legal separation.
• Danger: Protocol neutrality is eroded by off-chain legal pressure.

Unchecked MEV acts as a latency tax on users and a centralization force for validators. PBS formalizes this market, moving extraction from the shadows into a transparent auction.

• Key Benefit 1: User experience improves as front-running is commoditized and minimized.
• Key Benefit 2: Validator decentralization is preserved by separating block proposal from construction.

Builders are not miners; they are high-frequency optimization engines. Their edge comes from data pipeline latency, arbitrage algorithm sophistication, and cross-domain liquidity access.

• Key Benefit 1: Enables complex, cross-chain atomic bundles (see: Flashbots Suave, Across).
• Key Benefit 2: Creates a B2B market for block space, separating economic from consensus security.

The natural endpoint of PBS is oligopoly. The builder with the best data feeds, order flow, and capital will win most blocks, recreating miner centralization at a new layer.

• Key Benefit 1: This forces innovation in decentralized builder networks and MEV smoothing.
• Key Benefit 2: Creates investment thesis around vertical integration (e.g., searcher-builder-exchange).

The endgame shifts from transaction execution to intent fulfillment. Users express desired outcomes; a network of solvers (builders/aggregators) compete to fulfill them optimally (see: UniswapX, CowSwap).

• Key Benefit 1: Radically better UX; abstraction of wallet gas and slippage.
• Key Benefit 2: Enshrined PBS (e.g., Ethereum's roadmap) bakes the auction into protocol, mitigating trust assumptions.

The largest MEV opportunity is atomic arbitrage across rollups. This demands a shared sequencer or interoperability layer that builders can plug into (see: Espresso, Astria, LayerZero).

• Key Benefit 1: Unlocks interchain value flow as a primary revenue stream.
• Key Benefit 2: Makes rollups more economically secure by attracting professional block producers.

Invest in the infrastructure layer that builders depend on: ultra-low-latency data (e.g., Blocknative), RPC optimization, secure hardware (SGX/TEEs for encrypted mempools), and solver SDKs.

• Key Benefit 1: Infrastructure has higher defensibility than a single builder strategy.
• Key Benefit 2: Captures value across the entire PBS stack, not just the auction winner.