What is a block builder?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 5 min
In short
A block builder is a specialist that gathers pending transactions and assembles the contents of a block. Because ordering affects how much revenue a block yields, the job has separated from the proposer into dedicated operators. Whoever decides the order is also positioned to insert their own transactions around yours.
Key points
- Gathers and orders transactions into a block body
- Ordering determines how much the block earns
- The role is deliberately split from the proposer
- Control over ordering also enables sandwiching
Definition
An actor that computes the most profitable combination and ordering of pending transactions and supplies the block body to a proposer, forming one half of proposer-builder separation.
Filling a block is not simply a matter of sorting by fee. Transactions interact, so the order changes how much value the block yields. The computation is specialised and needs dedicated hardware and constant tuning, which is why assembly became its own role.
The assembled body is offered to proposers as a bid. The proposer picks the highest bid and signs it without inspecting the contents in detail. This is proposer-builder separation, designed so that proposers need not chase ordering profits themselves.
The power over ordering does not vanish, though. A builder can place its own transactions immediately before and after a user's swap and capture the price difference. Such sandwiching lands most easily against trades submitted with a wide slippage tolerance.
Watch out for
- · A wide slippage tolerance widens the margin a sandwich can take from you
- · If few actors do the assembling, censoring particular transactions becomes feasible
- · Assume your transaction is visible to others the moment you broadcast it