Proposer-Builder Separation (PBS)

Proposer-Builder Separation (PBS) is a blockchain architecture that formally separates the role of the block proposer (or slot leader) from the block builder. In this model, the proposer is responsible for selecting and publishing the next block header, while specialized builders compete in a marketplace to construct the most profitable block body, typically through a sealed-bid auction. This separation is designed to mitigate centralization risks inherent in Maximal Extractable Value (MEV) by preventing a single entity from monopolizing both block space selection and transaction ordering. PBS transforms block production into a two-stage process, introducing economic specialization and competition.

The primary mechanism enabling PBS is a commit-reveal scheme, often implemented via a builder marketplace. Builders receive transaction flow from users and searchers, optimize the block's content to capture MEV, and submit a cryptographic commitment (a bid) to the proposer. The proposer, often running relay software, selects the bid with the highest attached payment and commits only to the block header. The full block contents are revealed and validated by the network after the header is proposed. This process ensures the proposer cannot see the block's transactions before selection, preventing them from stealing profitable MEV strategies. Key implementations include Ethereum's mev-boost middleware, which facilitates this market for validators.

PBS addresses critical ecosystem concerns: it democratizes access to MEV revenue, reduces the hardware and capital requirements for individual validators, and enhances network censorship resistance by distributing block construction. By creating a competitive builder market, it aims to prevent the consolidation of power that could occur if the same entity always chose and ordered transactions. However, PBS introduces new trust assumptions, primarily in the relay, which must honestly mediate the auction and timely reveal block data. Ongoing protocol development, such as Ethereum's inclusion of PBS concepts into the core consensus layer (ePBS), seeks to minimize these external trust dependencies and further decentralize the block building process.

Proposer-Builder Separation (PBS) is a blockchain design pattern that formally splits the role of block production into two distinct, specialized parties: a block proposer (or validator) who chooses the canonical chain head, and a block builder who constructs the block's content. This architectural shift emerged as a direct response to the centralizing forces of Maximal Extractable Value (MEV) in proof-of-stake networks, particularly Ethereum. The term itself is descriptive, precisely naming the core functional division it introduces to the consensus layer.

The concept originated from academic and industry research around 2018-2019, as analysts observed that validators with sophisticated MEV extraction capabilities gained a significant economic advantage. This created a risk of validator centralization. Early proposals, such as the "Proposer/Builder Separation" scheme outlined by Ethereum researchers like Vitalik Buterin, sought to democratize access to MEV by creating a competitive market for block building. The goal was to isolate the trust-minimized, consensus-critical role of proposing from the computationally intensive and potentially centralized activity of optimizing block content for profit.

PBS evolved from a theoretical construct into a practical necessity with Ethereum's transition to proof-of-stake. The mev-boost middleware, launched after The Merge, implemented an off-protocol, builder market version of PBS, making it a de facto standard. Here, validators (proposers) outsource block construction to a competitive marketplace of specialized builders via relays. This off-protocol adoption served as a large-scale real-world test, proving the model's viability in mitigating MEV-driven centralization and paving the way for potential future enshrinement directly into the Ethereum protocol.

Proposer-Builder Separation (PBS) is a protocol-level architecture that formally splits the traditional validator role into two distinct, specialized parties: the block proposer and the block builder. The proposer is responsible for selecting and publishing the next block header to the chain, while the builder is responsible for constructing the block's full contents—ordering transactions, including MEV opportunities, and computing the state root. This separation is enforced through a commit-reveal scheme or a direct marketplace, where builders compete to sell their constructed blocks to proposers. The core innovation is that the proposer only sees a block header and a commitment to the full block, preventing them from censoring or manipulating specific transactions within it.

The mechanism typically operates through a sealed-bid auction in a builder market. Builders, who may be sophisticated entities running advanced algorithms to extract Maximum Extractable Value (MEV), assemble candidate blocks. They then submit cryptographic commitments (bids) for these blocks to a relay or directly to proposers. The bids include the proposed block header and the fee to be paid to the proposer. The proposer's role is simplified: they select the highest-paying, valid bid without viewing the block's internal transaction order. After the proposer signs and publishes the winning block header, the corresponding builder reveals the full block body for network validation.

This architecture addresses critical limitations in monolithic validator designs. By creating a competitive market for block building, PBS aims to democratize access to MEV, moving extraction from a hidden, off-chain activity to a transparent, on-chain auction. It enhances censorship resistance because the proposer cannot exclude transactions after choosing a builder's bid. Furthermore, it improves chain efficiency and scalability by allowing builders to specialize in complex transaction ordering and state computation, tasks that require significant capital and technical expertise. Protocols like Ethereum implement PBS through MEV-Boost as an interim solution, with a view to native, protocol-enforced PBS in future upgrades.

Proposer-Builder Separation (PBS) is a blockchain protocol design that formally separates the role of the block proposer (or validator) from the role of the block builder. In this model, specialized actors known as builders compete in an auction to construct the most valuable block by including transactions and MEV (Maximal Extractable Value) opportunities. The winning builder's block is then cryptographically committed to the proposer, who simply signs and proposes it to the network. This separation is a direct response to the rise of sophisticated MEV extraction, which had led to centralization where the largest staking pools also operated the most advanced block-building infrastructure, creating an uneven playing field.

The primary mechanism enabling PBS is a commit-reveal scheme, often implemented via a builder marketplace or a trusted relay. Builders submit sealed bids containing their block and a fee to the proposer. The proposer selects the bid offering the highest fee without seeing the block's contents, ensuring the selection is based purely on economic value. This auction, frequently conducted over a few seconds at the end of a slot, creates a competitive market for block space. Major implementations include Ethereum's mev-boost middleware, which operates in-protocol PBS through ePBS (enshrined Proposer-Builder Separation), a planned upgrade that will bake these mechanics directly into the consensus layer.

PBS delivers several key benefits: it democratizes access to MEV by allowing smaller validators to capture value from expert builders, reduces centralization risks by divorcing staking power from block-building capability, and improves chain efficiency through specialized optimization. However, it introduces new trust assumptions and centralization vectors, such as reliance on a small set of dominant builders or trusted relays. The evolution toward enshrined PBS aims to mitigate these risks by incorporating the separation natively into the protocol, reducing reliance on off-chain infrastructure and moving towards a more robust and decentralized long-term architecture for Ethereum and similar networks.