Long before the transition of the Ethereum network to Proof-of-Stake (PoS), censorship concerns have been a point of contention. To mitigate these risks, Vitalik Buterin has proposed “partial block auctions”.
In the last blog post, the co-founder of Ethereum suggested that builders should have more limited power to avoid censorship of ETH after the merger. Instead of letting them have all the reigns to build the entire block if they win an auction, builders would have a more limited amount of power.
Ways to limit block production power
According to Buterin, builders will retain enough power to be able to capture almost all of the maximum extractable value (MEV), as well as other benefits of proposer/builder separation (PBS). But the co-founder stressed that it should be weakened to “limit opportunities for abuse.”
As such, three possible ways to limit block production power were presented, including: inclusion lists, proposer suffixes, and pre-commit proposer suffixes.
- The include-list paradigm is where the proposer provides an include-list that essentially consists of a list of transactions that they are asking to be included in the block, unless the constructor fills a block entirely with other transactions. Despite the simplicity of the design, other drawbacks such as incentive compatibility issues and additional burdens on proponents can still be abused by the builder.
- Proposer suffixes are an alternative construct to allow the proposer to create a suffix for the block. The proposer’s intentions will not be visible to the constructor when building a block, and the proposer could append any transactions that the constructor missed to the end. This mechanism also has similar weaknesses.
- In precommit proposer suffixes, the proposer pre-commits to a Merkle or KZG tree on the set of transactions it wants to include in the block. The builder creates the block while the proposer adds the suffix, thus eliminating MEV opportunities for the latter, but also solving other drawbacks.
According to Buterin, both the proposer’s and the builder’s roles should ideally be minimal. However, this leaves many other important tasks unassigned, meaning that the introduction of a “third actor” into the block production pipeline is inevitable.
Despite the debate about centralization in the wider community, Ethereum’s core developers aren’t worried. At a pre-Merge developer call in August, the issue was thoroughly explored, with most agreeing on improving current MEV designs to improve PBS.
After the merger was completed, mining data highlighted Ethereum’s heavy reliance on Flashbots, which happens to be a single server for building blocks. This was enough to raise concerns of centralization by a single point of failure for the ecosystem. The data suggests that 83.5% of all relay blocks have been found to have been built by Flashbots alone.
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