# Unstaked vs Staked Builders in ePBS

This document explores the differences between staked and unstaked builders in the ePBS design.

## Introduction

As the name suggests, ePBS (enshrined Proposer-Builder Separation) integrates the builder entity directly into the Ethereum L1 protocol, separating execution block validation from consensus block validation.

Builders can stake collateral (32 ETH) with a 0x03 withdrawal credential to become enshrined within the protocol. A staked builder operates the same as any other validator: they earn rewards on their stake, send attestations and PTC attestations, and propose blocks when chosen as the proposer.

## How does the Protocol see a Staked Builder?

A staked builder is a validator with a 0x03 withdrawal credential, requiring at least 32 ETH stake to participate as a builder.

Staked builders can send bids to proposers via a P2P bidpool, or proposers can fetch bids from the builder via the builder-api.

They can pay proposers via the trustless payment mechanism or via trusted off-protocol payments as today, with the amount specified in the [execution_payment](https://github.com/ethereum/consensus-specs/blob/master/specs/gloas/beacon-chain.md?plain=1#L200) field.

The biggest barrier for staked builders is sourcing the 32 ETH capital requirement. However, the builder-api is simpler with staked builders, and they are more easily attributable to specific entities.

If the stake amount for builders is reduced from 32ETH at the cost of no yield, it can reduce the capital requirements to enter the builder market by a lot.

## How does the Protocol see an Unstaked Builder?

With unstaked builders, the protocol needs to reach out to a whitelisted set of actors.

Bids are fetched by proposers only through off-chain relays, and payments are done via trusted off-protocol mechanisms that are hard to verify.

Unstaked builders require no staked collateral, but this makes the builder-api more complicated.

## Why would a Builder want to be Staked?

Staked builders can access both trustless and trusted payment mechanisms, send bids to the P2P bidpool, and allow proposers to connect directly via the builder-api.

The tradeoff is that they must stake collateral to be enshrined within the protocol. This creates a barrier for relays and builders who are not well-capitalized, though if staking requirements are reduced at the cost of foregoing yield on the staked amount, less-capitalized builders could still enter the market.

## Why would a Builder want to be Unstaked?

Unstaked builders face no staking requirement and can stick to the status quo with trusted payments as today.

This makes it easier for relays and builders who are not well-capitalized to enter the market.