How Do MEV-boost Auctions Attempt to Democratize Access to MEV?
MEV-Boost is a system that separates the roles of block building and block proposing in Proof-of-Stake Ethereum. Proposers (validators) outsource the complex task of building a profitable block to a competitive market of third-party builders.
These builders create full blocks with MEV-extracting transactions and bid for their inclusion. The proposer simply selects the most profitable block bundle without needing to know its contents, thus democratizing access to MEV revenue beyond just large, sophisticated staking pools.
Glossar
Mev
Extraction ⎊ Maximal Extractable Value, or MEV, refers to the profit that can be extracted by block producers through their ability to reorder, insert, or censor transactions within a block.
Democratizing Access
Principle ⎊ This concept refers to the reduction of barriers to entry, such as high minimum investment thresholds or complex accreditation requirements, prevalent in traditional finance.
MEV Opportunities
Exploitation ⎊ The term "MEV Opportunities" denotes profitable trading strategies arising from manipulating the order of transactions within a blockchain, particularly prevalent in decentralized finance (DeFi).
MEV-Boost
System ⎊ MEV-Boost is a specific implementation framework, often used in Proof of Stake networks, that facilitates the separation of duties between block builders, who construct optimized transaction bundles to maximize MEV, and block proposers, who select the most profitable bundle for inclusion.
Centralization Risks
Control ⎊ Concentration of power within a few validators or large token holders introduces governance risk that can lead to protocol capture or adverse parameter changes.