What is proposer-builder separation (PBS)?
- Author
- CRYPTO PORT Editorial
- Published
- Updated
- Reading time
- 6 min
In short
PBS separates the role of assembling a block's contents from the role of proposing it. Extracting value from ordering requires specialised infrastructure, so splitting the roles reduces the advantage large validators would otherwise gain. On Ethereum it is currently realised outside the protocol, in software.
Key points
- Splits assembling a block from proposing it
- Limits how much ordering expertise favours large validators
- On Ethereum it operates outside the protocol today
- Creates a different concentration: dependence on intermediaries
Definition
A design principle that assigns the construction of a block's contents (builder) and the proposal of that block to the chain (proposer) to different parties.
Ordering transactions cleverly yields extra revenue from arbitrage and liquidations. Maximising it requires infrastructure that watches prices across venues and computes optimal orderings quickly. Expecting every validator to run that is unrealistic, and leaving it alone means only well-funded operators earn the most.
PBS assigns that specialist work to builders and leaves validators to receive a finished block and propose it. If builders compete and bid up, a small validator can capture comparable revenue. The point of the division is to keep the barrier to validating low.
On Ethereum this is not a protocol rule but something operated through external software such as MEV-Boost. When relays and builders concentrate into a few hands, the system becomes more exposed to censorship and outages. Proposals to build PBS into the protocol itself continue to be discussed.
Watch out for
- · Concentration among builders and relays opens the door to particular transactions being excluded
- · Because it sits outside the protocol, an operator going offline can translate into failed proposals
- · Separating the roles does not remove the fact that user transactions are a revenue source