Proposer-Builder Separation (PBS) is a blockchain design paradigm that separates the roles of proposing and building blocks in a blockchain network. In this model, the proposer (e.g., a validator or miner) is responsible for selecting and submitting blocks to the blockchain, while the builder specializes in constructing optimized blocks by selecting transactions and ordering them in a way that maximizes efficiency or profitability. PBS is particularly relevant in systems like Ethereum, where it aims to address issues such as centralization risks, transaction ordering manipulation (e.g., MEV—Maximal Extractable Value), and scalability challenges.
What Is Proposer-Builder Separation (PBS)?
Proposer-Builder Separation (PBS) is a mechanism designed to divide the responsibilities of block production in a blockchain network into two distinct roles: proposers and builders. Proposers are responsible for finalizing and submitting blocks to the blockchain, while builders focus on creating the most efficient or profitable blocks by selecting and ordering transactions.
This separation is intended to mitigate risks associated with centralization and manipulation in block production. By decoupling the two roles, PBS allows for a more specialized and competitive environment, reducing the influence of large, centralized entities that might otherwise dominate block production.
Who Is Involved in Proposer-Builder Separation (PBS)?
The key participants in PBS are:
- Proposers: These are typically validators or miners in a blockchain network. Their role is to select blocks created by builders and propose them to the blockchain for finalization.
- Builders: Builders are specialized entities or individuals who construct blocks by selecting and ordering transactions. Their goal is to optimize blocks for profitability, efficiency, or other criteria.
- Users: End-users indirectly interact with PBS by submitting transactions to the network. Builders and proposers ensure these transactions are included in blocks.
- Developers and Researchers: These stakeholders design and implement PBS mechanisms to improve blockchain performance and security.
When Was Proposer-Builder Separation (PBS) Introduced?
The concept of PBS gained prominence in the blockchain community as a response to the growing challenges of Maximal Extractable Value (MEV) and centralization risks. It became a focal point of discussion in Ethereum’s transition to Proof of Stake (PoS) with the Ethereum 2.0 upgrade. While the theoretical foundations of PBS were discussed as early as 2021, its implementation and experimentation have been ongoing, with Ethereum developers and researchers actively exploring its integration into the protocol.
Where Is Proposer-Builder Separation (PBS) Applied?
PBS is primarily discussed and applied in blockchain networks that face challenges related to MEV, transaction ordering, and centralization. Ethereum is the most notable blockchain exploring PBS, especially in its PoS consensus mechanism. However, the concept can be adapted to other blockchains that aim to improve decentralization and fairness in block production.
Why Is Proposer-Builder Separation (PBS) Important?
PBS addresses several critical issues in blockchain networks:
- Mitigating Centralization Risks: By separating the roles of proposers and builders, PBS reduces the power of large entities that might otherwise dominate block production.
- Reducing MEV Exploitation: Builders specialize in optimizing blocks, which can help reduce harmful MEV practices like front-running and sandwich attacks.
- Enhancing Decentralization: PBS fosters a more competitive and decentralized environment by allowing multiple builders to compete for block construction.
- Improving Scalability: By delegating block construction to specialized builders, proposers can focus on their core responsibilities, potentially improving network efficiency.
How Does Proposer-Builder Separation (PBS) Work?
PBS operates through a structured process that separates the roles of proposers and builders:
1. **Transaction Submission:** Users submit transactions to the network, which are collected in a mempool or similar transaction pool.
2. **Block Building:** Builders access the transaction pool and construct blocks by selecting and ordering transactions. They aim to optimize blocks for specific goals, such as maximizing fees or minimizing latency.
3. **Block Auction:** Builders submit their constructed blocks to proposers, often through an auction mechanism. Proposers evaluate the blocks and select the one that aligns with their criteria, such as the highest bid or best optimization.
4. **Block Proposal:** The selected block is proposed to the blockchain by the proposer, where it undergoes validation and is added to the chain.
5. **Finalization:** The block is finalized and becomes part of the blockchain, completing the process.
This separation ensures that block construction and block proposal are handled by specialized entities, improving efficiency, fairness, and decentralization in the network.
