The blockchain infrastructure company Flashbots has launched BuilderNet, a decentralized block building network on Ethereum with the goal of “destroying censorship” and addressing one of the network’s largest “bottlenecks.”
BuilderNet was launched on November 26, aiming to enable “multiple parties to collaborate in block building” at a critical time when about 88% of all Ethereum blocks have been built by Beaverbuild and Titan Builder in recent weeks.
This is an “extremely large” event as it will “destroy censorship” and exclusive order placement agreements on Ethereum, Coinbase protocol expert, Viktor Bunin, said on X.
Flashbots’ product manager, Shea Ketsdever, wrote on X that the first version of BuilderNet is now active on the Ethereum mainnet and will be offered as an additional solution for Layer-2 chains “in the future.”
Source: Shea Ketsdever
Ethereum employs a proposer-builder separation approach in block building, where builders create blocks for proposers to review, typically selecting the most profitable block.
However, the assignment of “specialized tasks” to specific agents has led to centralization issues, Ethereum co-founder Vitalik Buterin emphasized at the end of last month.
Flashbots stated that by distributing the “single block” block building process across a large network, we can prevent systemic bottlenecks from inviting censorship and draining from users.
“It is clear that the future of block building will be centralized, unless we act right now.”
About 45% of all Ethereum blocks have executed censorship to comply with the U.S. Office of Foreign Assets Control (OFAC) in the past five months, data from MEV Watch shows.
The fact that all transactions are included in the next block — however, the delayed inclusion in the block often gives the block builders extra time to extract revenue from users through sandwich attacks.
How BuilderNet works
BuilderNet operates on a “multi-operator” system where multiple parties contribute to block building in a “Trusted Execution Environment” — allowing all their protocols and users to verify transactions.
Maximum Extractable Value (MEV) — the amount of maximum value typically extracted from network validators by rearranging pending transactions — is instead redistributed to users while block builders are compensated through “refund rules.”
This change could impact Titan Builder, which has achieved over $40 million in “hidden” profits from MEV-Boost, according to one of the founders of Omni Network, Austin King.
The first version of BuilderNet is operated by Flashbots, Beaverbuild, and the Ethereum infrastructure company Nethermind.
Source: Shea Ketsdever
In future versions, Flashbots plans to make BuilderNet less restricted in access to enhance censorship resistance and decentralization.
Flashbots previously developed another decentralized block building solution — called Unified Auction for Value Expression, or SUAVE — in 2022 but large-scale deployment never came to fruition.
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