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# In-protocol PBS

* Why PBS?
* What kind of PBS?
* How to improve PBS?

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## Why PBS?

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* "MEV"
* Literal meaning: any value that the block proposer can extract (incl priority fees)
* De-facto meaning: value that requires sophisticated algorithms (optimized TX selection, DEX arbitrage, claiming on-chain bounties...)
* Result is economies of scale in block construction

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Economies of scale risk creating incentives for centralization.

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PBS separates "being a validator" into two roles:


<small>

<ol>
<li style="color:#ffff88"> A low-economies-of-scale "boring" notary function</li>
<li style="color:#ff8888"> A high-economies-of-scale block construction role
</li>
</ol>

</small>

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Goal: allow the block construction role to become more centralized (it's okay if one actor chooses > 50% of all block contents!), to preserve decentralization of the critical consensus layer.

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## What kind of PBS?

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PBS is structured as an _auction_:

&nbsp;

* Each block builder makes a _bid_ for the next slot
* The block proposer chooses the highest bid
* The block builder publishes the corresponding block

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Key properties we must preserve:

&nbsp;

* Builder can't cheat proposers
* eg. builder can't refuse to publish and deny the proposer their revenue
* Proposer can't cheat builders
* eg. proposer can't look at the builder's block and replace it with their own block "stealing" the builder's strategy

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MEV Boost (depends on trusted relayers)


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Two-slot PBS:


https://ethresear.ch/t/two-slot-proposer-builder-separation/10980

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One-slot PBS:


https://ethresear.ch/t/single-slot-pbs-using-attesters-as-distributed-availability-oracle/11877

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Do builders have to pre-commit to block contents?

* Advantage if yes:
* Builder profits are deterministic and guaranteed, making it easier to participate
* Advantages if no:
* More compatible with cross-domain MEV systems
* Winning builders could offfer pre-confirmation services

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## How to improve PBS?

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Censorship in PBS is still expensive. But it's much less expensive than censorship today.


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Idea 1: secondary blocks

&nbsp;

* Proposers can select "auxiliary blocks" which contain transactions censored by the main block
* Transactions now have many parallel opportunities to get included. Censors have to outbid the transactor many times

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Idea 2: crLists

&nbsp;

* Proposers can create lists of transactions, which the builder must include unless the block is too full to include all of them

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Internally decentralized builders

&nbsp;

* Builders can decentralize internally, accepting "bundles" from an open market of "searchers"
* Key challenge: preventing builders (and other searchers) from cheating searchers
* Solution path: searcher bundles encrypted until block is "locked in"
* Challenge: requires either a trusted builder, SGX or fast ZK-EVM

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Challenges

&nbsp;

* Agree on the in-protocol PBS design (may depend on single-slot finality!)
* Maximally solve censorship resistance
* Make it easier to build market-winning internally-decentralized builders
* More exploration into cross-domain MEV