ethereum pbs

What Is Ethereum Proposer-Builder Separation?

Ethereum Proposer-Builder Separation (PBS) is a block production model that divides the roles of “selecting a block” and “assembling a block.” In this framework, proposers are validators responsible for choosing and signing off on blocks when it’s their turn, while builders are specialized entities that sort transactions, assemble them into candidate blocks, and submit bids for their inclusion.

This can be likened to the relationship between a landlord and a renovation company: the landlord (proposer) decides which renovation plan to adopt and signs off, while the renovation company (builder) offers multiple quotes and design options. The relay acts as an intermediary, confidentially passing proposals and prices between landlord and renovation company, preventing information leaks or collusion.

Why Did Ethereum Introduce Proposer-Builder Separation?

The motivation behind Ethereum PBS is to address challenges related to MEV (Maximal Extractable Value) and network centralization. MEV refers to the additional value extractable from transaction ordering, such as front-running user transactions for profit. This makes “who gets to order transactions” a critical factor, favoring those with advanced algorithms and faster network access.

If proposers were responsible for both transaction search and ordering, it would favor large, specialized nodes, leading to centralization. PBS shifts the complex work of transaction assembly to builders, allowing proposers to focus solely on selection and signing, keeping the entry barrier for validators low. It also enables a market-driven and transparent reward system through competitive bidding. Since The Merge, external implementations like MEV-Boost have seen widespread adoption. This has spurred community research into protocol-native solutions to reduce trust assumptions and minimize censorship risk.

How Does Ethereum Proposer-Builder Separation Work?

The basic workflow of PBS is “builders assemble blocks and bid; proposers select the highest bid.” In each Ethereum slot (about 12 seconds), multiple builders independently order transactions and create candidate blocks, submitting confidential bids and block headers to the proposer via relays.

Upon receiving these bids, the proposer selects the candidate block offering the highest profit or best aligned with their strategy, signs it, and broadcasts it to the network. Relays ensure confidentiality: they do not disclose full block contents before proposer signature, preventing strategy leakage or manipulation.

For example: A builder notices a large buy order on a decentralized exchange, bundles related transactions in an optimal sequence to capture arbitrage within legal bounds, and shares part of this profit with the proposer through their bid. Multiple builders compete for each slot, driving better prices for proposers and more optimized blocks.

What Impact Does Proposer-Builder Separation Have on Validators?

PBS allows validators to focus on consensus and signing, without having to develop complex transaction search systems themselves. The main impacts for validators include: changes in revenue structure, operational complexity, and reliance on relays and builders.

On revenue: Validators earn not only standard block rewards and transaction fees but also share in extra profits from transaction ordering through builder bids. Operationally, using external markets requires connecting to one or more relays and maintaining a stable network setup. Regarding reliance, validators must trust relays to relay information confidentially and promptly without malicious behavior or censorship.

For regular users participating in staking via platforms (such as purchasing ETH on Gate and joining staking products), validator returns are typically shared indirectly. However, annualized returns can fluctuate based on market conditions and block transaction composition—always review product terms and risk disclosures.

How to Participate in and Deploy Proposer-Builder Separation?

If you are a validator, you typically participate in PBS using external market tools. The common steps include:

Step 1: Prepare your validator environment. Ensure both execution and consensus clients are running reliably, maintain robust bandwidth and time synchronization, and set up your fee recipient address.

Step 2: Install and run market bridging tools. Deploy external components that support builder bidding; these interface with relays and deliver candidate block bids to your validator client.

Step 3: Configure relay lists. Select several reputable relays to diversify risk, enable failover and health checks to avoid missing slots due to single points of failure.

Step 4: Monitor and audit operations. Track bids and outcomes for each slot, assess earnings and latency; set alerts to prevent slashing due to network or timing issues.

If you are a regular investor, you can purchase ETH on Gate and review its staking or financial product descriptions to see if returns are linked to validator rewards or include extra revenue from PBS mechanisms. Before participating, evaluate liquidity, yield volatility, and platform rules.

What’s the Difference Between Proposer-Builder Separation and MEV-Boost?

PBS refers to the “protocol-level separation of roles,” whereas MEV-Boost is a widely adopted “external market implementation.” The core distinction is whether the solution is built into the protocol.

With MEV-Boost, proposers interact with builders via external relays—this introduces trust in relays and potential censorship but offers deployment flexibility and rapid iteration. Protocol-native PBS (“in-protocol PBS”) aims to internalize key workflows within Ethereum itself, reducing reliance on external trust assumptions and information leaks while unifying security boundaries. However, this approach requires longer research cycles and upgrades to balance security, complexity, and decentralization.

What Risks Are Associated with Proposer-Builder Separation?

While PBS increases efficiency and revenue opportunities, it introduces new risks. The builder market may centralize if a few large builders dominate most slots, undermining fair competition. If relays censor or delay message transmission, it can lower returns or cause missed blocks.

For validators, misconfiguration, time desynchronization, or network outages can result in slashing or missed block proposals. For users, risks such as transaction privacy or reordering persist—choosing secure wallets and submission channels is important. When handling funds, pay attention to both platform rules and protocol changes; avoid relying on a single source of yield.

What Are the Future Trends for Ethereum Proposer-Builder Separation?

The direction for PBS is “less reliance on external trust, stronger censorship resistance, balancing privacy with efficiency.” In the short term, external markets will continue to dominate; tools and relays will be further optimized and diversified. In the medium term, community research focuses on protocol-native solutions to minimize relay trust requirements and data leakage. Over the long term, advancements may combine enhanced privacy protection with anti-censorship features—balancing builder competition, user experience, and network security.

Overall, PBS shifts technical complexity from validators to professional builders, allocating transaction ordering rewards through competitive bidding. Participants should understand its operations and risks—making informed decisions about tooling choices, reward evaluation, and compliance requirements.

FAQ

As a regular user, do I need to know about Proposer-Builder Separation?

Regular users do not need to interact directly with PBS but understanding it helps you follow Ethereum’s evolution. This mechanism mainly affects validators, stakers, and staking pool operators who can earn additional revenue by participating in PBS. As an end user, you indirectly benefit from improved network censorship resistance and reduced negative MEV impact.

Will Proposer-Builder Separation make Ethereum more centralized?

This is one of the main risks of PBS. If a few powerful builders dominate the market, an oligopoly could emerge with proposers forced to choose from a small pool of builders. However, the Ethereum community is developing L1-PBS solutions that introduce more competition at the protocol level to maintain decentralization.

Does PBS affect my transaction costs?

Indirectly, yes. By separating roles, builders can order and bundle transactions more efficiently—which theoretically lowers overall gas costs. Improved management of MEV also reduces user losses from frontrunning. Actual effects depend on specific implementations and market competitiveness.

If I stake Ethereum on Gate, will I automatically benefit from PBS yields?

This depends on Gate’s validator strategy. If Gate uses MEV-Boost or related PBS solutions, stakers can receive additional MEV income. Check Gate’s staking documentation or contact customer support to confirm whether PBS-related revenue sharing is enabled.

How do individual builders ensure they act honestly—for example, not excluding certain transactions deliberately?

Two mechanisms ensure honest behavior: First, proposers can select from multiple competing builders—there’s no dependency on a single builder. Second, Ethereum protocol rules validate block correctness; malicious builders are detected and lose reputation or revenue opportunities. Economic incentives encourage honest participation.