How Does a Proposer-Builder Separation (PBS) Architecture Aim to Solve This Issue?
Proposer-Builder Separation (PBS) aims to mitigate issues like front-running and MEV centralization by splitting the roles of a validator. A "builder" specializes in constructing the most profitable block possible by ordering transactions.
A "proposer" (the validator chosen to create the next block) simply accepts the most profitable, pre-packaged block from a competitive market of builders without seeing the contents. This prevents the proposer from using their power to reorder transactions or steal MEV opportunities for themselves, while making access to MEV revenue more competitive.
Glossar
Mev Centralization
Concentration ⎊ MEV centralization describes the trend where the capability to extract Maximum Extractable Value becomes concentrated among a small number of specialized block builders or searchers, often due to superior infrastructure and proprietary algorithms.
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.
Architecture
Framework ⎊ Architecture within cryptocurrency, options trading, and financial derivatives represents the underlying computational and governance structures enabling decentralized finance (DeFi) protocols and the issuance, trading, and settlement of derivative contracts.
Proposer-Builder Separation (PBS)
Mechanism ⎊ Proposer-Builder Separation (PBS) represents a critical architectural refinement within blockchain systems, specifically designed to decouple the roles of proposing new blocks from the execution of those blocks, enhancing scalability and mitigating risks associated with Maximal Extractable Value (MEV).
Proposer
Role ⎊ A proposer in a Proof-of-Stake blockchain is a validator node selected to create and broadcast the next block to the network.
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.