# How PBS works and why it's important to Ethereum --- ## Recap: hard-to-discover MEV * Internal Uniswap arbitrage (A -> B, B -> C, C -> A) * Uniswap vs Sushiswap arbitrage (A -> B on UNI, B -> A on SUSHI) * Uniswap vs offchain exchange arbitrage (A -> B on UNI, B -> A on Binance) * Liquidations (eg. of MakerDAO CDPs) * NFT purchases ---  --- ## Why is hard-to-discover MEV a problem? * MEV discovery requires specialized software that needs to be constantly updated * Only specialized actors can effectively optimize MEV revenue * Large pools can hire them -> creates pressure for stakers to join large pools --- ## Proposer / builder separation * Goal: separate out the task with strong centralizing pressures (selection of block contents) from the rest of block validation * Idea: block proposers sell the right to decide the contents of their block to the highest bidder, on-chain --- ## Current proposed design  --- ## Security properties of the current design <small> * Payment to the proposer is unconditional (so proposers do not need to trust builders) * Builder has to reveal on time. If they do not, they pay their bid to the proposer but do not collect fees from the block * No risk of "MEV stealing" in the normal case: builder only reveals once block that confirms winning bid is "safe" * Censorship of builder requires 51% attack on committee </small> --- ## Challenges with the current design * Involves multiple steps per slot, requiring increased block times or stronger latency assumptions * If one builder consistently wins, can they censor?