PBS Changes Who Controls Ethereum Blocks

Without PBS, the largest validators (e.g., Lido, Coinbase) directly capture all MEV, centralizing power and profits. This creates a self-reinforcing loop where the rich get richer, threatening network neutrality.

• Dominant Stake: Top 5 entities control ~60% of stake.
• Captured Value: Estimated $500M+ in MEV extracted annually by a concentrated few.

PBS creates a competitive auction for block space. Specialized builders (e.g., Flashbots SUAVE, bloXroute, beaver) compete to create the most valuable blocks, separating economic power from consensus power.

• Efficiency Gain: Builders optimize for ~99% of extractable value.
• New Revenue: Proposers earn via builder bids, not direct extraction.

Relays (e.g., Flashbots, bloXroute, Agnostic) become critical trust hubs. They receive blocks from builders and deliver them to proposers, creating a new centralization and censorship vector.

• Critical Infrastructure: >90% of post-merge blocks flow through major relays.
• Censorship Risk: Relays can filter transactions, creating regulatory compliance pressure points.

Block builders, not validators, now control transaction ordering. Centralized builders like Flashbots and bloXroute can censor transactions to comply with OFAC sanctions, threatening Ethereum's neutrality.

• Risk: >50% of blocks built by compliant entities.
• Impact: Creates a two-tier system where sanctioned addresses are excluded from the canonical chain.

Pushing PBS into the protocol (ePBS) with crLists (censorship resistance lists) forces builders to include transactions from the public mempool.

• Mechanism: Proposer provides a mandatory transaction list.
• Goal: Decouple block building from transaction inclusion, neutralizing censorship at the builder layer.

Builders can form cartels to monopolize MEV extraction, manipulating prices and extracting maximum value from users on Uniswap and Aave.

• Risk: >80% builder market share controlled by a few entities.
• Impact: Reduces validator profits, centralizes chain control, and increases user costs.

Decentralized builder networks like Flashbots' SUAVE aim to democratize block building by separating the roles of searcher, builder, and proposer.

• Architecture: Shared mempool and compute network.
• Goal: Break cartels, increase competition, and return MEV profits to a broader set of participants.

Builders with superior MEV extraction capabilities can profitably reorg recent blocks to capture missed value, undermining chain finality.

• Attack Vector: Private mempool transactions create information asymmetry.
• Impact: Threatens ~12s time-to-finality, creating uncertainty for DeFi and bridges like LayerZero.

Ethereum's roadmap towards single-slot finality (SSF) and protocols like MEV smoothing make reorgs economically irrational.

• Mechanism: Finalize blocks immediately, or redistribute MEV rewards across all validators.
• Goal: Eliminate the profitability of chain reorganizations, securing the head of the chain.

Without PBS, the block proposer (validator) has a monopoly on block construction, leading to inefficient MEV extraction and opaque, centralized value capture.\n- Centralization Risk: Solo validators can't compete with sophisticated MEV bots.\n- Inefficient Markets: MEV profits are not maximized for the network or users.

PBS introduces a specialized builder role that competes in an open auction to create the most valuable block for the winning proposer.\n- Efficiency: MEV is extracted by specialists, maximizing value.\n- Revenue Redistribution: Proposer revenue becomes more predictable and fair via the winning bid.

Control shifts from 1000s of proposers to a handful of dominant builders (e.g., Flashbots, bloXroute). A malicious or compliant builder can systematically exclude transactions.\n- Regulatory Attack Vector: A single entity can be forced to censor.\n- Solution Path: Requires crLists (censorship resistance lists) and MEV-Boost++ to enforce inclusion.

Current PBS via MEV-Boost is a middleware patch. The endgame is enshrined PBS in the core protocol.\n- MEV-Boost (Now): Trusted relay, extra complexity, but operational.\n- Enshrined PBS (Future): Native auction, eliminates trust in relays, simplifies consensus.

PBS formalizes a three-tier MEV supply chain. Searchers (e.g., arbitrage bots) find opportunities, Builders aggregate them into blocks, Proposers simply accept the highest bid.\n- Specialization: Each layer optimizes for a specific function.\n- Liquidity: Creates a liquid market for block space.

The ultimate evolution is a decentralized block builder. SUAVE (Single Unifying Auction for Value Expression) aims to be a neutral, chain-agnostic marketplace for preference expression and execution.\n- Decentralizes Building: Removes the trusted builder oligopoly.\n- Cross-Chain: Unifies MEV markets across Ethereum, layerzero, avalanche.