PBS addresses validator centralization by separating the roles of block proposing and building. This prevents validators from capturing all MEV, theoretically decentralizing power. The Ethereum roadmap explicitly mandates PBS for this reason.
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Blog
The Future of MEV: Will Proposer-Builder Separation Save Us?
PBS (MEV-Boost) solved validator centralization by outsourcing block building. The unintended consequence: a new, opaque cartel of professional builders now controls the MEV supply chain, raising profound ethical and centralization questions.
introduction
THE PROBLEM
Introduction: The Centralization Shell Game
Proposer-Builder Separation (PBS) is a structural response to the centralization of block production, but it risks shifting power to a new, more opaque cartel.
The power shifts to builders, creating a new centralization vector. Builders like Flashbots and bloXroute now compete on capital efficiency, leading to a cartel of sophisticated, vertically-integrated entities.
Relays become critical trust points in this new model. Centralized relays like the Flashbots Relay act as the mandatory, trusted channel between builders and proposers, creating a single point of failure and censorship.
Evidence: Post-Merge, over 90% of Ethereum blocks are built by a cartel of three builders. This builder market is more concentrated than the validator set PBS was designed to fix.
key-trends
BEYOND PBS
The New MEV Landscape: Three Unavoidable Trends
Proposer-Builder Separation is a necessary but insufficient step; the real battle for the chain's economic core is just beginning.
01
The Problem: PBS Centralizes Power
PBS outsources block production to a cartel of sophisticated builders, creating a new, opaque layer of centralization. The winning builder is the one who can pay the validator the most, not the one who provides the best user experience.
- Builder dominance: Top 3 builders produce >80% of Ethereum blocks.
- Opaque auctions: Validators see only the highest bid, not the transaction composition.
- Regulatory risk: Centralized builders become fat targets for enforcement.
>80%
Builder Dominance
0
Tx Transparency
02
The Solution: Enshrined PBS & SUAVE
The endgame is protocol-level PBS and a neutral, decentralized block building market. Ethereum's EIP-4844 paves the way for enshrinement, while Flashbots' SUAVE aims to be a universal preference chain for decentralized block building.
- Credible neutrality: Protocol rules, not builder reputation, enforce fairness.
- Composability: A shared auction layer for all chains fragments builder power.
- User intents: Moves competition from back-running to serving explicit user orders.
EIP-4844
Ethereum Roadmap
SUAVE
Universal Auction
03
The Inevitable Trend: Intents & Solving
The future is intent-based architectures where users declare what they want, not how to do it. Solvers (like those in CowSwap, UniswapX, Across) compete to fulfill these intents optimally, internalizing and democratizing MEV.
- User empowerment: MEV benefits flow back to the intent originator.
- Efficiency leap: Solvers find paths across DEXs, bridges, and lenders in one bundle.
- Privacy by default: Intents are shared privately with a solver network, not broadcast publicly.
UniswapX
Intent Pioneer
~90%
Better Prices
deep-dive
THE REALITY
The Builder Cartel: Anatomy of a New Power Structure
Proposer-Builder Separation (PBS) has not decentralized block production; it has formalized a new oligopoly of specialized builders.
PBS created a cartel. The separation of block proposing and building was meant to democratize MEV. Instead, it created a specialized builder market where a few entities like Flashbots, bloXroute, and Titan dominate due to superior infrastructure and capital.
Builders are the new validators. The real power shifted from the proposer to the entity that can construct the most profitable block. This requires sophisticated MEV-boost relays, private mempools, and exclusive order flow, which are capital-intensive moats.
Centralization is a feature. The builder market's efficiency demands scale. A single builder with 90% of the market share can produce a more profitable, gas-optimized block than a fragmented network of small builders. This is the PBS efficiency paradox.
Evidence: Post-merge Ethereum data shows that the top three builders consistently produce over 80% of blocks. The Flashbots SUAVE initiative is a direct attempt to re-decentralize this cartel, proving the problem is systemic.
POST-MERGE ANALYSIS
Builder Market Share & Centralization Metrics
A comparison of the current PBS landscape, its dominant players, and the centralization risks they present to Ethereum's neutrality.
| Metric / Feature | Flashbots (MEV-Boost) | Titan Builder (Rated) | rsync Builder | Decentralized PBS (Ideal) |
|---|---|---|---|---|
Dominant Builder Market Share (30d Avg) | 35% | 22% | 15% | N/A |
Proposer Censorship Compliance | ||||
OFAC Sanctions Filtering | ||||
Avg. Block Value Extracted (ETH) | 0.8 | 1.1 | 0.7 | 0.0 |
Builder Relays Used (Primary) | Flashbots, BloXroute | BloXroute, Aestus | Manifold, Ultra Sound | Permissionless Set |
Requires Trusted Hardware (SGX) | ||||
Open Source Builder Code | ||||
Avg. Time to Finality Impact | < 5 slots | < 5 slots | < 5 slots |
|
counter-argument
THE ARCHITECTURAL IMPERATIVE
Steelman: PBS is a Necessary Evolutionary Step
Proposer-Builder Separation is the only viable path to scaling Ethereum's consensus without centralizing block production.
PBS decouples roles to solve a fundamental scaling conflict. The validator's job is to attest to chain head, not to run complex, resource-intensive MEV optimization software. This specialization is identical to the separation of execution and consensus in the rollup stack.
Without PBS, staking centralizes. Solo validators cannot compete with professional builders like Flashbots, bloXroute, or Titan. The resulting economies of scale will force staking into a few large, MEV-optimized pools, replicating the miner centralization problem Proof-of-Stake was meant to solve.
In-protocol PBS (ePBS) is the endgame. Current out-of-band solutions like mev-boost are a temporary crutch. The ultimate goal is a protocol-level commitment, similar to how EIP-1559 formalized fee markets, which enforces the separation and makes censorship resistance a verifiable protocol property.
risk-analysis
SYSTEMIC FRAGILITY
The Bear Case: Four Systemic Risks of the PBS Era
Proposer-Builder Separation (PBS) centralizes block production, creating new attack vectors and economic distortions.
01
Builder Cartelization & OFAC Compliance
The capital-intensive builder market naturally consolidates, creating a handful of dominant players like Flashbots and bloxroute. This centralization creates a single point of regulatory pressure, enabling de facto censorship.\n- Top 3 builders consistently produce >50% of Ethereum blocks.\n- Compliance tools like MEV-Share and MEV-Boost can be used to enforce OFAC sanctions lists.
>50%
Top 3 Builders
OFAC
Compliance Risk
02
The MEV Supply Chain Attack
PBS creates a multi-party supply chain (User -> Searcher -> Builder -> Proposer) where trust is non-existent. A malicious or compromised builder can steal MEV or reorg chains.\n- Time-bandit attacks where builders withhold blocks to exploit future MEV.\n- Out-of-band payments between builders and proposers undermine the auction's credibility.
Multi-Party
Trust Assumptions
Time-Bandit
Attack Vector
03
Economic Capture by Liquid Staking Derivatives (LSDs)
Entities like Lido and Coinbase control massive validator stakes. They can vertically integrate builder operations, internalizing MEV profits and creating a feedback loop that further centralizes stake.\n- Lido's ~30% staking share gives it outsized influence over the builder market.\n- This creates a proposer-builder merger, defeating PBS's core decentralization goal.
~30%
Lido Staking Share
Vertical Integration
Risk
04
The Latency Arms Race & Infrastructure Centralization
Winning block auctions requires sub-second latency, privileging builders with proprietary infrastructure and direct links to relays. This creates a geographic and capital moat.\n- Builders invest millions in low-latency fiber and colocation near validators.\n- This excludes decentralized builder pools and reinforces the data center hegemony of AWS/GCP.
<500ms
Auction Latency
AWS/GCP
Infra Dependence
future-outlook
THE PBS REALITY CHECK
What's Next: The Path to Credible Neutrality
Proposer-Builder Separation is a necessary but insufficient step toward a neutral transaction ordering layer.
PBS is not a panacea. It separates block production from validation but centralizes power in a few sophisticated builders like Flashbots and bloXroute. This creates a new oligopoly that controls transaction ordering.
Credible neutrality requires enforceable rules. PBS alone lacks a mechanism to prevent builders from censoring transactions or extracting maximal MEV. The protocol needs slashing conditions for adversarial behavior.
The endgame is enshrined PBS. The current outsourced model via MEV-Boost is a temporary patch. Ethereum's roadmap integrates PBS directly into the consensus layer, baking neutrality into the protocol's economic security.
Evidence: Over 90% of post-Merge Ethereum blocks are built by just three entities. This concentration proves that decentralization of block building, not just proposing, is the next frontier.
takeaways
MEV FUTURE & PBS
TL;DR for Protocol Architects
Proposer-Builder Separation is a structural reform, not a silver bullet. Here's what it solves, what it doesn't, and the next-order problems it creates.
01
The Problem: Censorship is Structural
PBS centralizes block building power into a few professional builders (e.g., Flashbots, BloXroute). Compliance with OFAC sanctions becomes trivial at this layer, threatening credible neutrality.\n- >50% of Ethereum blocks are OFAC-compliant post-Merge.\n- Builders can exclude any transaction, creating a permissioned mempool.
>50%
OFAC Blocks
~5
Dominant Builders
02
The Solution: Enshrined PBS & MEV-Boost++
Move PBS into the protocol core to enforce builder neutrality and enable in-protocol MEV smoothing. This is the endgame for Ethereum, while Solana and Aptos explore local fee markets.\n- Enshrined PBS prevents builder-level censorship.\n- MEV-Boost++ adds commit-reveal schemes for fairer extraction.
0
Protocol Censorship
~2025+
Ethereum ETA
03
The New Problem: MEV Supply Chain Attacks
PBS creates a multi-party supply chain (User -> Searcher -> Builder -> Proposer). Each link is a new attack surface for time-bandit attacks and builder collusion.\n- Builders can steal searcher bundles ($100M+ at risk).\n- Proposers can reorg profitable blocks if bribed enough.
$100M+
Bundle Value at Risk
4+
Attack Layers
04
The Frontier: SUAVE & Intents
The real fix is moving computation off-chain. Flashbots' SUAVE aims to be a decentralized block builder and encrypted mempool. Meanwhile, intent-based architectures (like UniswapX, CowSwap) abstract execution away from users entirely.\n- SUAVE: Decentralizes the builder role.\n- Intents: Users declare goals, solvers compete, eliminating frontrunning.
100%
Execution Privacy
-99%
User Complexity
05
The Metric: MEV Tax vs. L1 Revenue
PBS's success is measured by how efficiently it converts extracted value into protocol security. Today, >90% of MEV is captured by searchers/builders, not the chain. The goal is to flip this ratio through proposer payments and MEV smoothing.\n- Current: <10% to L1 stakers.\n- Target: >50% captured for protocol security.
<10%
Current L1 Capture
$1B+
Annual MEV
06
The Reality: PBS is Table Stakes
Every high-throughput chain will need PBS or a variant (Aptos, Sui, Monad). It's not about eliminating MEV, but managing its externalities. The real competition is in the execution layer design (parallel VMs, shared sequencers) and user experience (intents, account abstraction).\n- PBS manages economic centralization.\n- Execution Innovation determines the winner.
All
High-TPS L1s
UX
Final Battleground
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