What is MEV-Boost & Proposer-Builder Separation (PBS)?

The Rise of MEV-Boost and Proposer-Builder Separation on Ethereum

If you’ve been anywhere near the Ethereum ecosystem since The Merge, you’ve probably heard whispers—or maybe even loud shouts—about MEV. Maximal Extractable Value. It sounds a bit like a villain’s master plan, and honestly, sometimes it can be. For years, MEV has been a shadowy, complex force driving centralization and creating an uneven playing field. But the game is changing. The post-Merge era has ushered in a radical new approach to building blocks, centered around a powerful duo: MEV-Boost and Proposer-Builder Separation. This isn’t just a minor upgrade; it’s a fundamental restructuring of who does what on Ethereum, with massive implications for stakers, decentralization, and the future of the network.

Key Takeaways

• Proposer-Builder Separation (PBS): This is a core concept that splits the job of building a block (selecting and ordering transactions) from proposing a block (signing and broadcasting it to the network).
• MEV-Boost: Developed by Flashbots, MEV-Boost is the practical, out-of-protocol software that implements PBS for Ethereum validators today. It allows validators to auction off their blockspace to specialized ‘builders’.
• Democratizing MEV: MEV-Boost gives all validators, including solo stakers, access to the most profitable blocks, leveling the playing field that was previously dominated by large mining pools.
• Centralization Concerns: While it solves some problems, the current implementation introduces new centralization vectors around block builders and relays, which are critical points of potential failure or censorship.
• The Future is ePBS: The long-term goal is to ‘enshrine’ Proposer-Builder Separation directly into the Ethereum protocol itself (ePBS) to create a more trustless and robust system.

What Even is MEV? The Problem We’re Trying to Solve

Before we can appreciate the solution, we have to truly understand the problem. What is this MEV thing anyway? In simple terms, Maximal Extractable Value (MEV) is the profit a block producer (a miner in Proof-of-Work, or a validator in Proof-of-Stake) can make by including, excluding, or reordering transactions within a block they produce.

Think of the Ethereum mempool as a crowded waiting room full of people shouting out transaction requests. The block producer is the one who gets to decide who gets into the next ‘room’ (the block) and in what order. This power is incredibly valuable. If you see someone trying to buy a huge amount of an asset on a decentralized exchange (DEX), you could place your own ‘buy’ order right before theirs and a ‘sell’ order right after, profiting from the price slippage you create. This is a classic ‘sandwich attack’, and it’s just one flavor of MEV.

The Good, The Bad, and The Ugly of MEV

Not all MEV is inherently evil. Some of it is actually crucial for market efficiency.

• Arbitrage: Bots spot price differences for the same asset on two different DEXs and execute trades to bring them back in line. This is generally seen as a healthy, market-correcting form of MEV.
• Liquidations: In lending protocols like Aave or Compound, MEV bots are essential for liquidating under-collateralized loans, which protects the protocol from insolvency.

But then there’s the ugly side.

• Sandwich Attacks: As described above, this is predatory trading that results in a worse execution price for regular users. It’s pure, unadulterated front-running.
• Generalized Front-running: Bots scan the mempool for any profitable transaction and try to copy it, replacing the original user’s address with their own and paying a higher gas fee to get included first.

Why Validators Were in a Tough Spot

This created a massive headache. For a validator to capture this MEV, they needed to run incredibly sophisticated, custom software. They had to monitor the mempool, identify opportunities, and construct the most profitable block possible. This is a full-time job for entire teams of quantitative analysts and developers. A solo staker running a node in their basement? They stood no chance. This led to a huge disparity: large, sophisticated staking pools could earn significantly more from the same 32 ETH than a small, independent validator. This is a powerful centralizing force. It pushes stakers toward the big players, eroding the decentralization that makes Ethereum valuable in the first place.

The Old Way: Pre-Merge MEV Extraction

In the Proof-of-Work world, this problem was just as real for miners. The first major attempt to bring some order to this chaos came from a research and development organization called Flashbots.

The Rise of MEV-geth and Flashbots

Flashbots introduced a system called MEV-geth. It was a modified version of the popular Geth Ethereum client. Instead of just picking transactions from the public mempool, MEV-geth created a sealed-bid auction system. MEV ‘searchers’ would bundle their transactions (e.g., an arbitrage or sandwich attack) and submit them directly to miners running MEV-geth, along with a ‘bribe’ paid directly to the miner’s address.

This had two key benefits:

1. It stopped clogging the network. Failed bids and bot wars were no longer spamming the public mempool, which helped reduce gas price volatility for everyone.
2. It democratized access (sort of). It gave miners who didn’t want to run their own complex searcher infrastructure a way to still capture MEV revenue by simply running MEV-geth.

However, it was still a system where the miner was both building and proposing the block. They had full visibility into all transactions and all bids. The Merge and the switch to Proof-of-Stake provided a golden opportunity to redesign this entire process from the ground up.

The Merge Changes Everything: Enter MEV-Boost and Proposer-Builder Separation

This is where our main characters enter the stage. The core idea is simple but profound: what if the validator responsible for proposing the next block didn’t have to build it themselves? What if we separated these two roles completely? This is the essence of Proposer-Builder Separation (PBS).

How Proposer-Builder Separation (PBS) Works

Under PBS, the Ethereum network has two distinct roles:

• Builders: These are highly specialized, sophisticated entities. Their only job is to look at the entire universe of available transactions (from the public mempool, private order flow, etc.) and construct the most profitable block possible. They are competing against other builders to create the block with the highest total value (transaction fees + MEV).
• Proposers (Validators): The validator chosen to propose the next block no longer needs to run complex software. Their job is simplified. They just need to look at the blocks offered by all the competing builders and pick the one with the highest bid. They sign that block and broadcast it to the network, collecting the bid as their reward.

Crucially, the proposer cannot see the contents of the block they are signing. They only see the block header and the total value of the bid. This prevents them from stealing the MEV opportunities found by the builder. It’s a blind auction.

The Key Players: Builders, Relays, and Proposers

The current, out-of-protocol implementation of PBS is called MEV-Boost. It introduces a third, critical party to make this all work in a trust-minimized way.

• Builders: As above, they build the full, juicy blocks.
• Proposers (Validators): They run their normal consensus client, plus a small piece of sidecar software called MEV-Boost.
• Relays: These are the trusted intermediaries. Builders submit their blocks to relays. The relay checks that the block is valid and that the bid is legitimate. The relay then passes only the block header and the bid amount to the proposer. When the proposer signs a header, the relay broadcasts the full block content to the network. Relays are the lynchpin of trust in this system.

A Deep Dive into the MEV-Boost Architecture

Let’s walk through the lifecycle of a single block in the MEV-Boost world. It happens fast—all within a 12-second slot.

The Block Auction in Action: A Step-by-Step Walkthrough

1. Competition: Dozens of block builders are constantly monitoring transactions and competing to find the most profitable combination. They assemble full blocks.
2. Submission to Relays: The builders send their completed blocks to one or more relays. They say, “Here’s my block. I’m willing to pay the proposer X ETH to include it.”
3. A Proposer is Chosen: The Ethereum protocol pseudo-randomly selects a validator to be the proposer for the upcoming slot.
4. The Validator Queries Relays: The proposer’s MEV-Boost software pings all the relays it’s connected to and asks, “What’s the best bid you’ve got for me?”
5. Relays Respond: The relays send back the headers and bid values of the most profitable blocks they’ve received from builders. They do not send the block contents.
6. The Winning Bid: The proposer’s MEV-Boost software reviews all the bids. It selects the highest one. Let’s say it’s a 0.5 ETH bid from a block submitted via the ‘UltraSound’ relay.
7. Signing the Header: The validator signs the header of the winning block and sends the signed header back to the UltraSound relay. This is their commitment. It’s like signing a contract saying, “I accept your 0.5 ETH offer.”
8. Broadcasting the Block: The UltraSound relay, upon receiving the valid signed header, immediately broadcasts the full block contents (the part the proposer never saw) to the rest of the Ethereum network. The transaction executing the 0.5 ETH payment to the validator is included right in that block.

If for any reason the builder’s block is invalid or the relay fails to publish it in time, the validator’s software has a fallback mechanism to build its own (less profitable) block locally to ensure the chain doesn’t halt.

The Role of Relays: Trust but Verify

Relays are the most controversial part of this design. They are a centralizing force and a point of trust. Validators must trust that the relay will:

• Accurately represent the builder’s bid.
• Not withhold blocks from them.
• Actually publish the block once they provide a signature.
• Not censor transactions (a hot topic we’ll get to).

If a relay goes down, any validator connected only to that relay might miss out on a profitable block. This is why it’s critical for validators to connect to multiple, diverse relays.

The Benefits and The Big Debates

MEV-Boost isn’t perfect, but it’s a massive improvement. It has fundamentally reshaped the validator landscape, but not without introducing new challenges.

Democratizing MEV Access for Solo Stakers

This is the system’s single greatest achievement. Before MEV-Boost, a solo staker’s rewards were limited to the base protocol issuance. Now, they have access to the exact same high-value MEV blocks as the biggest players like Coinbase and Kraken. They simply install the MEV-Boost software, connect to some relays, and they’re in the game. This has dramatically increased the profitability and appeal of solo staking, which is a massive win for Ethereum’s decentralization and long-term health.

The Specter of Centralization and Censorship

Here’s the rub. The system shifts centralization away from proposers and onto builders and relays. Today, a handful of builders produce the vast majority of all Ethereum blocks. This is a powerful position. What happens if these few builders are pressured by a government to censor certain transactions, like those interacting with privacy protocols like Tornado Cash?

This isn’t a theoretical concern. After OFAC sanctioned Tornado Cash addresses, some major relays began filtering transactions to remain compliant. This means any proposer using only those relays was effectively censoring the network, even if they didn’t intend to.

This has sparked a fierce debate in the community. Is it better to have a more profitable and democratic system that introduces new censorship vectors? Or should we prioritize censorship resistance above all else? The good news is that the ecosystem is responding, with new ‘permissionless’ relays and builders emerging that promise not to censor any transactions.

Is This All Getting Too Complicated?

Another valid criticism is the sheer complexity of this whole setup. We’ve added builders, relays, and sidecar software to what was once a more straightforward process. Each new component is a potential point of failure or attack. While the system has proven remarkably stable, it’s a far cry from the elegant simplicity many strive for in protocol design. This complexity is a primary motivator for the next major evolution: enshrining PBS into the protocol itself.

The Future: Enshrined PBS (ePBS)

MEV-Boost was always intended to be a transitional technology. The ultimate goal is to build the core logic of Proposer-Builder Separation directly into the Ethereum protocol. This is known as enshrined PBS, or ePBS.

Why Put PBS Directly into the Protocol?

Enshrining PBS would eliminate the need for trusted external relays. This is the biggest single improvement. The protocol itself would handle the responsibilities that relays manage today:

• Commitment Schemes: Instead of a builder sending a full block to a relay, they would send a ‘commitment’ to their block. The protocol could enforce that if a proposer accepts a bid, the builder must reveal the corresponding block or be slashed (lose a portion of their stake).
• Data Availability: The protocol would ensure that the full block data is available once a proposer signs off on it.
• Trustlessness: By removing the relay, we remove a major centralized, trusted component, making the entire system more robust and censorship-resistant.

The Road Ahead

Designing ePBS is one of the most active and complex areas of Ethereum research today. There are multiple competing proposals, such as those based on two-slot PBS or optimistic relays. The exact implementation is still being debated, but the goal is clear: capture the benefits of MEV-Boost (democratized MEV, reduced validator load) while shedding its biggest weakness (reliance on trusted relays). It’s a key part of the ‘Endgame’ vision for a scalable and decentralized Ethereum.

Conclusion

The introduction of MEV-Boost and Proposer-Builder Separation is one of the most significant developments in Ethereum’s history, second only to The Merge itself. It’s a pragmatic solution to the messy, centralizing reality of MEV. It has successfully leveled the economic playing field for validators, making solo staking more viable than ever before. But this solution has come at a cost, introducing new, highly centralized actors in the form of builders and relays and kicking off a critical, ongoing battle over censorship resistance. The journey isn’t over. As we move toward an enshrined, in-protocol version of PBS, the community continues to grapple with these trade-offs, striving to build a network that is not only secure and efficient but also credibly neutral and open to all.

FAQ

Is MEV-Boost mandatory for Ethereum validators?

No, it is not mandatory. A validator can choose to run their node without MEV-Boost. If they do, they will simply build their own blocks from the public mempool when it’s their turn to propose. However, they will miss out on the significant additional revenue from MEV, so today, an overwhelming majority (over 90%) of validators run MEV-Boost because it is far more profitable.

Does PBS solve all of the negative problems of MEV?

Not entirely. While PBS and MEV-Boost make the distribution of MEV revenue more fair, it doesn’t eliminate harmful MEV like sandwich attacks. Users are still subject to these predatory strategies. The difference is that the profit is now more cleanly captured and distributed to validators via builder bids, rather than being concentrated in the hands of a few sophisticated mining pools. Other solutions, like private order flow applications (e.g., MEV Blocker) are aimed at protecting users directly from these negative externalities.

What’s the difference between a relay and a builder?

Think of them as having separate, specialized jobs in the supply chain. The builder is the manufacturer; they assemble the product (the block) by finding the most valuable combination of transactions. The relay is the trusted escrow and logistics agent; they verify the product is legitimate, hold it confidentially, present the offer to the buyer (the proposer), and ensure final delivery once the deal is signed.