Proposer-Builder Separation (PBS) is an architectural modification in proof-of-stake blockchain protocols that decouples the role of block production into two distinct entities: block proposers and block builders. Its purpose is to decentralize the power of transaction ordering and mitigate Maximal Extractable Value (MEV) by separating block content creation from block header signing.
Mechanism
The operational mechanism involves block builders competitively creating and bidding on full blocks of transactions, optimizing for MEV and submitting these sealed blocks to block proposers. Proposers, in turn, select the highest-bidding valid block header and sign it, without necessarily knowing the internal transaction contents. This separation removes the proposer’s direct control over transaction ordering.
Methodology
The strategic approach aims to enhance censorship resistance, improve network decentralization, and reduce the concentration of MEV extraction power among a few large validators. This methodology introduces an auction market for block space, allowing specialized builders to optimize block value while ensuring that proposers act as neutral arbiters of block validity and economic efficiency.
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