‘Massive’ — BuilderNet aims to solve Ethereum’s centralized block problem

Blockchain infrastructure firm Flashbots has launched BuilderNet, a decentralized block-building network on Ethereum to “kill censorship” and solve one of the network’s biggest “chokepoints.”

BuilderNet, launched on Nov. 26,  said it aims to allow “many parties to collaborate in building blocks.” This comes at a crucial time as around 88% of all Ethereum blocks have been built by Beaverbuild and Titan Builder in recent weeks.

This is “absolutely massive” as it will “kill censorship” and exclusive order flow deals on Ethereum, Coinbase’s protocol specialist Viktor Bunin said on X.

Flashbots’ product manager Shea Ketsdever wrote on X that the first release of BuilderNet is now live on Ethereum’s mainnet and will be available as a drop-in solution for decentralized sequencing on layer 2s “later on.”

Ethereum follows the proposer-builder separation method for block construction, where builders create blocks for proposers to review, who often choose the most profitable one.

But assigning “specialized” tasks to specific actors has led to centralization problems, Ethereum’s co-creator Vitalik Buterin stressed late last month.

Flashbots said that by distributing the “monolithic process of block building across a large network, we can prevent systemic chokepoints that invite censorship and rent extraction from users.”

“It is abundantly clear that the future of block building will be centralized, unless we act now.”

Nearly 45% of all Ethereum blocks have enforced censorship to comply with the United States Office of Foreign Assets Control (OFAC) over the last five months, MEV Watch data shows.

Essentially, all transactions are included in a following block; however, slower block inclusion often gives block builders more time to extract user revenue via sandwich attacks.

How BuilderNet works

BuilderNet runs on a “multioperator” system where multiple parties contribute to block building in a “Trusted Execution Environment” — allowing all protocols and their users to verify transactions.

Maximal Extractable Value (MEV) — the maximum amount of value typically extracted from network validators by reordering transactions waiting for confirmation — is instead redistributed back to users while block builders are compensated via a “refund rule.”

The change could impact Titan Builder, which has racked up over $40 million in “hidden profit” from MEV-Boost, according to one of Omni Network’s founders, Austin King.

The first release of BuilderNet is operated by Flashbots, Beaverbuild, and Ethereum infrastructure firm Nethermind.

In future releases Flashbots intends to make BuilderNet more permissionless to further strengthen censorship resistance and decentralization.

Flashbots was initially developing a different decentralized block-building solution — called Single Unifying Auctions for Value Expression or SUAVE — in 2022 but a full-scale rollout never materialized.

Source: https://cointelegraph.com/news/flashbots-buildernet-ethereum-centralized-block-building-issues