According to Flashbots, only a handful of operators control over 90% of Ethereum’s blocks at this time.
Blockchain infrastructure provider Flashbots has launched BuilderNet, a solution it hopes would check the centralization issues that currently exist in Ethereum’s block-building process.
With this new innovation, the firm seeks to not only shape how block builders operate but also improve decentralization across the network in general.
According to Flashbots, only a handful of operators control over 90% of Ethereum’s blocks at this time. These so-called block builders are responsible for compiling transaction bundles and submitting them to validators for maximal extractable value (MEV).
As it were, MEV refers to the maximum amount of profit that can be gained from a blockchain transaction. However, the possibility of exclusive MEV deals, given the few number of block builders, continues to raise concerns about Ethereum’s security and fairness.
For context, this exclusive MEV allows the dominant operators to control the order of transactions, reducing the network’s censorship resistance and fairness for smaller validators.
Flashbots to Use BuilderNet to Address a Growing Problem
With proper knowledge of the issue on the ground, Flashbots has now brought BuilderNet to the rescue. This solution comes as a model that encourages block building in a collaborative manner. That is, multiple operators may now work together using trusted execution environments, which securely encrypt and process order flows. Essentially, this multi-operator system will ensure that block building is no longer restricted to the operations of a few centralized entities alone.
To deploy BuilderNet, Flashbots has tapped block builder Beaverbuild and Ethereum client provider Nethermind as its initial partners. Together, they aim to achieve decentralization that would not be limited to Ethereum alone but also will cover Ethereum-based rollups and applications.
Expected Benefits
For starters, Flashbots aims to see Ethereum become more resistant to censorship. So, decentralizing the block-building process is a major step in the right direction. Besides, BuilderNet also provides better privacy and security with its encrypted order flows, which will ensure secure transactions.
Furthermore, there is a forward plan to ensure that, over time, there will be a fair environment for all contributors. So, in line with that, BuilderNet will champion an equitable MEV distribution system. This will allow the creation of a more balanced MEV ecosystem, benefiting a wider range of contributors.
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