Proposer-Builder Separation

What Is Proposer-Builder Separation?

Proposer-Builder Separation (PBS) represents a fundamental architectural innovation in Ethereum's consensus mechanism that emerged during the development of Ethereum 2.0. This concept addresses the growing complexity and centralization risks associated with block production by introducing a clear division of labor in the block creation process.

In Ethereum's previous Proof of Work system and early Proof of Stake implementation, miners or validators were responsible for both proposing new blocks and building the contents of those blocks, including ordering and validating transactions. This dual responsibility created potential inefficiencies and centralization pressures, as entities with greater computational resources or specialized knowledge could gain disproportionate advantages.

The Proposer-Builder Separation framework fundamentally transforms this model by dividing these responsibilities into two distinct and specialized roles. Block builders focus exclusively on constructing the actual contents of a block, including the critical tasks of ordering and validating transactions. Meanwhile, block proposers concentrate on the responsibility of proposing new blocks to be added to the blockchain, ensuring the integrity and continuity of the chain.

This separation is currently in an advanced research stage and is expected to be finalized and implemented in the coming years as part of Ethereum's ongoing evolution toward greater scalability and decentralization.

Responsibilities of Block Proposers and Block Builders

The division of responsibilities under PBS creates two highly specialized roles, each with distinct functions and technical requirements.

Block Builders operate at the transaction level, performing several critical functions. They continuously monitor the mempool to gather pending transactions, carefully validating each transaction to ensure it meets all network requirements, including proper gas limits, correct nonce values, and valid signatures. Once validated, block builders assemble these transactions into a structured block body, making strategic decisions about transaction ordering to optimize block space utilization and gas efficiency.

The ordering process is particularly significant, as block builders must balance multiple considerations: maximizing the value of included transactions, ensuring fair treatment of users, and maintaining network efficiency. After constructing the block body, builders make this data structure available to block proposers through a standardized interface, often competing with other builders to have their block bodies selected.

Block Proposers operate at a higher level of the consensus mechanism. They receive block bodies from various builders and select which one to include in the next block. Proposers then create a complete block by adding essential metadata through the block header, which includes critical information such as the parent block's hash, timestamp, state root, and other consensus-related data.

Proposers also perform validation checks to ensure the correctness and integrity of the block body provided by builders. This includes verifying that all transactions are properly formatted, that the block doesn't exceed size limits, and that it adheres to all consensus rules. Finally, proposers broadcast the complete block to the network for validation and inclusion in the blockchain.

How Could Proposer-Builder Separation Impact Maximal Extractable Value?

Maximal Extractable Value (MEV) refers to the profit that miners or validators can earn by strategically ordering, including, or excluding transactions within a block they produce. In Ethereum's ecosystem, MEV has gained significant attention as validators extract increasingly substantial value, particularly within DeFi (Decentralized Finance) applications where transaction ordering can directly impact trading outcomes and arbitrage opportunities.

The current MEV landscape has led to several negative consequences for network participants. Frontrunning, where validators or miners observe pending transactions and place their own transactions ahead of them to profit from price movements, has become increasingly common. This practice often results in higher transaction fees for regular users and creates unfair advantages for large-scale miners or validators with sophisticated MEV extraction infrastructure.

Proposer-Builder Separation fundamentally alters the dynamics of MEV extraction by redistributing the opportunities and responsibilities between two distinct roles. Since block builders become solely responsible for transaction ordering and inclusion decisions, they inherit the primary MEV extraction opportunities. This separation creates a competitive market for block building, where multiple builders compete to create the most valuable blocks for proposers.

This competition among builders could lead to more efficient MEV extraction strategies and potentially fairer distribution of MEV value across the network. Builders might develop specialized techniques for identifying and capturing MEV opportunities, while proposers benefit from selecting the most valuable block bodies offered by builders.

Furthermore, PBS may reduce the likelihood of certain harmful practices like frontrunning by making the MEV extraction process more transparent and competitive. However, it's important to note that while PBS changes the MEV landscape significantly, it may not eliminate all MEV-related issues entirely. New strategies and dynamics may emerge as participants adapt to the PBS framework, requiring ongoing research and potential additional mechanisms to address remaining concerns.

Scaling With Proposer-Builder Separation and Danksharding

Danksharding represents another crucial innovation in Ethereum's scaling roadmap, named after Ethereum researcher Dankrad Feist. This approach to sharding within the Ethereum 2.0 upgrade introduces a novel method for scaling the blockchain by splitting it into multiple smaller chains, or "shards," that can process transactions and smart contracts independently and in parallel.

Unlike traditional sharding approaches, Danksharding simplifies the sharding design by focusing on data availability rather than execution sharding. Each shard operates parallel to others, allowing for a significant increase in transaction throughput without requiring every validator to process every transaction across all shards.

Both Proposer-Builder Separation and Danksharding share the common goal of improving Ethereum's scalability, security, and efficiency, but they approach this objective from different angles. PBS optimizes the block production process by separating roles and enabling specialization, while Danksharding increases the network's overall capacity by enabling parallel transaction processing across multiple shards.

These two innovations are highly complementary and can work synergistically within Ethereum's architecture. While Danksharding focuses on expanding the network's horizontal capacity by distributing transaction processing across multiple shards, PBS optimizes the vertical efficiency of block production within each shard or the main chain.

In a system implementing both PBS and Danksharding, block builders could specialize in constructing optimal block bodies that efficiently utilize the increased data availability provided by sharding. Meanwhile, block proposers could focus on coordinating across shards and ensuring the overall consistency and security of the network. This combination creates a more robust and scalable infrastructure that addresses both throughput limitations and resource utilization challenges.

What Are the Benefits of Proposer-Builder Separation

Proposer-Builder Separation offers several significant advantages that contribute to Ethereum's long-term scalability and decentralization goals.

Improved Efficiency and Scalability: By dividing responsibilities, PBS enables each role to specialize and optimize its respective tasks. Block builders can focus on developing sophisticated transaction ordering algorithms and MEV extraction strategies, while proposers can concentrate on maintaining network consensus and security. This specialization leads to better overall resource utilization and improved network performance.

Enhanced Decentralization: PBS lowers the barriers to entry for network participation by allowing individuals to specialize in either building or proposing. Participants who may not have the resources or expertise to perform both functions effectively can now contribute meaningfully to the network by focusing on one role. This increased accessibility promotes greater decentralization and reduces the risk of centralization around a small number of powerful validators.

More Efficient MEV Distribution: PBS creates a competitive market for block building, which can lead to more efficient and fairer distribution of MEV across the network. Instead of MEV being captured entirely by validators with the most sophisticated infrastructure, the separation allows for market-based mechanisms to distribute MEV value more broadly, potentially reducing negative consequences for regular users.

Increased Competition and Innovation: The separation creates distinct competitive landscapes for builders and proposers. Block builders compete to create the most valuable and efficient block bodies, driving innovation in transaction ordering and optimization techniques. This competition ultimately benefits the entire network through improved performance and reduced transaction costs.

Better Resource Allocation: PBS allows network participants to allocate their resources more effectively based on their strengths and capabilities. Those with strong computational resources can focus on building, while those with significant stake can focus on proposing, leading to more optimal use of the network's collective resources.

What Are the Limitations of Proposer-Builder Separation

Despite its significant benefits, Proposer-Builder Separation also presents several challenges and limitations that must be carefully considered and addressed.

Increased System Complexity: Introducing PBS adds an additional layer of complexity to the blockchain network's architecture. The coordination between builders and proposers requires new protocols, communication channels, and validation mechanisms. This complexity can make the system harder to understand, implement, and maintain, potentially introducing new attack vectors or failure points that must be carefully managed.

Incomplete MEV Solution: While PBS redistributes MEV between block builders and proposers, it does not entirely eliminate the negative consequences associated with MEV extraction. New strategies and dynamics in MEV extraction may emerge under PBS, potentially creating different but equally challenging issues. For example, builders might develop sophisticated techniques that still disadvantage regular users, or collusion between builders and proposers could recreate centralization concerns.

Centralization Risks: The division of labor in PBS may paradoxically lead to centralization in certain scenarios. If there are significant economies of scale in block building—such as advantages from operating large-scale infrastructure or accessing proprietary MEV extraction techniques—a small number of specialized block builders might come to dominate the network. Similarly, proposers with substantial stake might gain disproportionate influence. This centralization could undermine the decentralization benefits that PBS aims to achieve.

Coordination Challenges: PBS relies on effective coordination between block builders and proposers, which could introduce latency or other performance bottlenecks. The communication overhead required for builders to submit block bodies to proposers, and for proposers to validate and select among competing submissions, adds time to the block production process. In a high-throughput network, these delays could impact overall performance.

Incentive Structure Complexity: Designing appropriate incentive structures for both block builders and proposers presents significant challenges. The system must ensure that both parties are fairly compensated for their efforts while preventing gaming or manipulation of the incentive mechanisms. Striking the right balance is particularly difficult given the dynamic nature of MEV extraction and the potential for changing market conditions. If incentives are misaligned, it could lead to suboptimal behavior, such as builders withholding valuable transactions or proposers favoring certain builders unfairly.

Implementation and Transition Risks: Moving from the current system to a PBS architecture requires careful planning and execution. The transition period may introduce temporary vulnerabilities or inefficiencies as the network adapts to the new model. Additionally, ensuring backward compatibility and smooth migration for existing validators and infrastructure presents technical challenges that must be thoroughly addressed.

FAQ

What is Proposer-Builder Separation (PBS)? Why is it important?

PBS separates block proposal and transaction building roles in Ethereum's consensus layer. It reduces harmful MEV extraction and enhances network security through fair transaction ordering and censorship resistance.

How does Proposer-Builder Separation solve the MEV (Maximum Extractable Value) problem?

Proposer-Builder Separation reduces MEV by decoupling block proposal from construction, minimizing miners' incentives to prioritize profitable transactions. This separation ensures impartial block ordering and limits MEV exploitation opportunities.

In the PBS model, what are the roles and responsibilities of proposers and builders respectively?

Proposers propose new blocks and validate the chain, while builders construct blocks by selecting and ordering transactions. This separation enhances network security, censorship resistance, and MEV protection through specialized roles.

What is the relationship between Proposer-Builder Separation and Ethereum's PoS consensus mechanism?

Proposer-Builder Separation divides block production roles in Ethereum's PoS. Builders organize and order transactions, while Proposers validate blocks and participate in consensus voting. This separation enhances network efficiency and security.

What impact will PBS implementation have on blockchain decentralization and security?

PBS enhances decentralization and security by reducing individual node control over transaction ordering. It prevents proposers from manipulating transaction sequences, strengthening overall network resilience and censorship resistance.

Which projects or protocols have already implemented or plan to implement Proposer-Builder Separation?

Ethereum has implemented PBS in its Danksharding upgrades. Multiple protocols are adopting PBS to enhance decentralization and network efficiency. As of 2026, PBS is actively deployed across Ethereum's shard chains and adopted by various layer-2 solutions.