block builder

A block builder is a specialized actor whose entire job is to assemble the most valuable possible block — choosing which transactions to include and in exactly what order — and then sell that block to a proposer. Under proposer-builder separation, builders are the ones who do the hard, profitable work of ordering. They take the public mempool plus private order flow, and they solve what is essentially an optimization problem: arrange transactions so the total value the builder can extract and pay out (fees plus MEV) is maximized.

Building well is genuinely sophisticated. A builder searches over orderings to capture arbitrage between decentralized exchanges, place liquidations, and bundle MEV searchers' transactions, often running combinatorial optimization under a tight time budget — a block must be ready within Ethereum's 12-second slot. Builders frequently receive bundles directly from searchers (pre-packaged sequences of transactions with a bid), as well as exclusive private order flow from wallets and apps that route transactions to builders instead of the public mempool to avoid being front-run.

The builder then submits its finished block, along with a bid representing how much it will pay the proposer, to relays. The proposer (via MEV-Boost) picks the highest bid and proposes that block; the builder profits from the difference between the value it extracted and the bid it paid. Competition among builders is what pushes most of the extractable value back to proposers — in a healthy market a builder must bid up nearly to the block's full value to win, so validators capture the lion's share of MEV.

The central worry is builder centralization. Building competitively rewards scale: exclusive order flow, low-latency infrastructure, and proprietary optimization create strong economies of scale, so block building tends toward a small number of dominant builders. Since builders decide block contents, a concentrated builder market is also a concentrated point of potential censorship. This is why the ecosystem watches builder market share closely and pursues inclusion lists and enshrined PBS to ensure that even a powerful builder cannot quietly exclude valid transactions from the chain.