# Proposer-builder separation (PBS) - Devconnect Distributed R&D The success of [`mev-boost`](https://boost.flashbots.net) since the Merge demonstrates the extreme demand validators have for outsourcing block construction to an external counterparty who can specialize in maximizing execution layer (EL) rewards. This outsourcing function is what we mean by the prhase "proposer-builder separation" (PBS). All else equal, higher EL rewards mean higher validator revenue which directly contributes to chain security as it makes staking more attractive which scales the proof-of-stake security margin as more validators join the L1 consensus set.[^1] While this incentive is nice for validators, it is a double-edged sword as the more MEV extraction becomes the norm, the more validators are required to participate to stay competitive amongst their peers. This pressure to compete is a directly centralizing force which in the long run would fragilize the validator set. The Ethereum community acknowledges PBS as a direct solution to avoid this centralizing pressure as the mechanism moves the competition to the builder counterparty, allowing each individual validator to remain unsophisticated on this front and just as competitive. Given the fundamental nature of MEV and the importance of PBS to address it, the Ethereum community also seeks as robust an implementation as possible. `mev-boost` is an off-chain implementation of PBS and unforunately requires a weaker trust model to instantiate. In particular, `mev-boost` introduces a "relay" actor that brokers the blockspace auction between builder and proposer. This relay is mutually trusted to enforce the guarantees of this auction and failures at the relay layer have led to [successful hacks calling into question the PBS value proposition](https://collective.flashbots.net/t/post-mortem-april-3rd-2023-mev-boost-relay-incident-and-related-timing-issue/1540). Moreover, relays today are centralized entities subject to regulatory constraints that [impinge upon the censorship resistance](https://www.censorship.pics) of this part of the protocol eroding core values of the Ethereum community itself. Taken together, there has been various discussion around how to improve the trust model of the relay actor, possibly enshrining some PBS construction directly into the protocol itself. This track aims to discuss these latest proposals and gain consensus around possible future directions for PBS on Ethereum. ## Pre-reads - [if nothing else, read this:] https://ethresear.ch/t/relays-in-a-post-epbs-world/16278 - https://ethresear.ch/t/payload-timeliness-committee-ptc-an-epbs-design/16054 - https://ethresear.ch/t/why-enshrine-proposer-builder-separation-a-viable-path-to-epbs/15710 - [nice charts] https://mevboost.pics ### Additional (broader) context - https://ethresear.ch/t/proposer-block-builder-separation-friendly-fee-market-designs/9725 - https://collective.flashbots.net/t/pbs-guild-proposal-v3-wip/2223#i-motivation-2 ## Open questions * Exploring ePBS designs with good properties for both proposer and builder * PTC (see pre-reads) doesn't protect builders very well under adversarial validator conditions * Bypassability of ePBS designs and what it means for the success of any such construction * realities of builder behavior today, cancellations * What is the future of the public mempool and its relation to censorship resistance? * [inclusion lists](https://ethresear.ch/t/no-free-lunch-a-new-inclusion-list-design/16389) are promising design direction and need more r&d consideration * ["mev burn"](https://ethresear.ch/t/dr-changestuff-or-how-i-learned-to-stop-worrying-and-love-mev-burn/17384) * A direct extension to ePBS to reduce MEV volatility. * Further analysis of the design * Future of blockspace markets, a la [PEPC](https://ethresear.ch/t/unbundling-pbs-towards-protocol-enforced-proposer-commitments-pepc/13879) * Can we reduce the incentive to deviate from ePBS by allowing for the efficient expression of any/most proposer-builder agreements? * What would it take to safely implement PEPC in the base layer protocol? * Extensions to `mev-boost` to harden off-chain PBS * [updates to validator registrations](https://notes.ethereum.org/W-rfDoXkSZSwZ8k4oOlE0g?view) * [updates to clients to reduce implementation centralization](https://notes.ethereum.org/Owy6Hb_oRfe7lUZaLeZWqA) ## Meetings TBD ## Notes TBD [^1]: All else is very much not equal but questions around "morality of MEV" and long-run staking economics are out of scope of this track.