A Builder is a specialised participant in blockchain block production that constructs candidate blocks by selecting, ordering, and combining transactions with the aim of creating a valid and economically competitive block. The role is particularly important in Ethereum’s modern block production market, where block construction can be separated from the validator responsible for proposing the block.
Builders emerged as specialised participants largely because transaction ordering has economic value. A block does not generate the same revenue under every possible transaction arrangement. Arbitrage, liquidations, transaction fees, searcher bundles, and other forms of Maximal Extractable Value (MEV) can make one block construction strategy significantly more profitable than another.
A builder attempts to assemble the most valuable valid block available under the protocol’s constraints. It can receive transactions from the public mempool, private order flow, searchers, and other sources. The completed candidate block is then offered to the validator selected to propose the next Ethereum block, typically through infrastructure that coordinates the proposer-builder market.
This makes a Builder different from an Ethereum block proposer. The builder determines much of the block’s content and ordering, while the proposer is the validator with the protocol-level responsibility to propose the selected block to Ethereum.
Why Block Building Became a Specialised Role
Constructing a valid Ethereum block is relatively straightforward compared with constructing the most economically valuable block possible.
A validator building locally could select transactions largely according to available fees. Modern DeFi creates much more complicated opportunities. A price difference between decentralised exchanges may create an arbitrage. An undercollateralised lending position can create a liquidation opportunity. Several transactions may become more profitable when executed in a particular sequence.
Finding these opportunities requires specialised infrastructure. Professional block builders can operate low-latency systems, evaluate large numbers of possible transaction combinations, receive bundles from searchers, and maintain connections to multiple sources of order flow.
If every Ethereum validator had to develop this infrastructure independently, sophisticated staking organisations would have a major advantage over smaller validators. Specialised builders allow validators to outsource much of this optimisation.
Instead of trying to discover every MEV opportunity, the proposer can receive competing block offers from builders. Builders compete by offering the proposer part of the value generated by their candidate blocks.
This division of labour allows block-building technology to become highly specialised without requiring the same technical sophistication from every validator.
How a Builder Constructs an Ethereum Block
A builder needs transactions and information about potential ordering opportunities. There is no single source for this information.
Public Ethereum transactions can be observed through the mempool. Searchers can also submit bundles containing transactions arranged around a specific MEV strategy. Some wallets, applications, or trading systems may send transactions through private order-flow channels rather than broadcasting them publicly.
The builder evaluates these inputs and searches for a block configuration that maximises expected value while remaining valid.
A simplified process looks like this:
- The builder receives transactions from public and private sources.
- Searchers submit bundles containing specific transaction sequences or MEV strategies.
- The builder evaluates transaction fees, bundle payments, gas constraints, and ordering opportunities.
- Candidate transaction combinations are simulated to ensure they execute correctly.
- The builder constructs a valid block within Ethereum’s protocol limits.
- A bid representing the block’s value is submitted to the proposer-builder market.
- If the bid wins, the block is delivered for proposal to Ethereum.
The builder cannot simply include any profitable transaction combination. The candidate block must satisfy Ethereum’s execution rules and fit within applicable block constraints.
A builder also needs to calculate how much value to retain and how much to offer to the proposer. Offering too little may cause another builder to win. Offering too much can reduce or eliminate the builder’s profit.
Block building is therefore both a technical optimisation problem and a competitive auction business.
Builder, Searcher, Proposer and Relay
Ethereum’s MEV supply chain contains several roles that are easy to confuse. A searcher can create a profitable bundle without constructing the entire block, while a builder can combine many such bundles and transactions into a complete candidate block.
| Participant | Primary Function | Typical Input | Typical Output |
| User | Initiates blockchain activity | Intended transaction | Signed transaction |
| Searcher | Identifies MEV opportunities | Mempool and on-chain state | Transaction bundle |
| Builder | Constructs competitive blocks | Transactions, bundles, private order flow | Candidate block and bid |
| Relay | Connects builders with proposers in external PBS infrastructure | Builder bids and blocks | Coordinated bid/block delivery |
| Proposer | Proposes the selected block | Builder offer or locally built block | Proposed Ethereum block |
These roles can be operated by related organisations, but they represent different functions.
Searchers are generally specialists in particular strategies. One searcher might focus on arbitrage, another on liquidations. Builders operate at a higher level because they need to combine potentially competing bundles with ordinary transactions while respecting block constraints.
Relays have been important in the MEV-Boost architecture because builders need a way to offer valuable blocks without immediately revealing all of their contents to proposers. The proposer ultimately remains responsible for signing and proposing the block.
What Makes One Builder More Competitive?
Builders compete primarily on the value of the blocks they can construct. The proposer has a financial incentive to choose an attractive bid, so builders capable of finding more value can win a larger share of block opportunities.
Access to order flow is particularly important. A builder that receives transactions unavailable to competitors may discover profitable combinations that others cannot reproduce.
Private order flow can therefore become a competitive advantage. Wallets, trading applications, searchers, and RPC services can direct transactions through channels that do not immediately expose them to the public mempool.
Simulation infrastructure also matters. Builders need to evaluate large numbers of possible transaction combinations quickly enough to produce a candidate before the next block deadline.
Latency creates another advantage. Ethereum block production operates under strict timing constraints. A builder that receives information earlier or calculates profitable configurations faster has more time to optimise its block.
Builder competition consequently depends on several resources:
- access to public and private transaction flow;
- relationships with MEV searchers;
- fast and accurate transaction simulation;
- algorithms for optimising transaction and bundle combinations;
- low-latency networking and infrastructure;
- effective bidding strategies;
- reliable delivery of valid blocks.
These factors can produce economies of scale. A successful builder can attract more searchers and order flow because participants want access to a builder that frequently wins blocks. More order flow can then make the builder even more competitive.
This feedback loop is one reason builder concentration is an important concern.
Builders and MEV
MEV is fundamental to the builder business model. Builders are not merely selecting transactions with the highest ordinary gas fees. They are assembling blocks in an environment where ordering itself can create economic value.
Suppose a large trade causes a price difference between two decentralised exchanges. A searcher may construct an arbitrage bundle that profits from correcting the difference. The searcher can offer part of that profit for inclusion.
A builder can compare that bundle with other available opportunities and determine where it fits within the candidate block. Several bundles may conflict because they depend on the same state or attempt to capture the same opportunity.
The builder must select the combination that produces the greatest total block value.
Some MEV activities can improve market efficiency. Arbitrage helps align prices, while liquidations are necessary for maintaining collateral requirements in lending protocols. Other strategies can negatively affect users. Sandwich attacks are a prominent example in which transaction ordering can worsen a trader’s execution.
Builders therefore occupy a sensitive position. They do not create every MEV strategy themselves, but their decisions determine which bundles and transactions enter candidate blocks and in what order.
Builder Centralisation and Private Order Flow
The builder market introduces a centralisation problem different from validator concentration.
Ethereum can have a large and geographically distributed validator population while a much smaller number of builders construct a significant proportion of blocks. The two forms of decentralisation should therefore be analysed separately.
Private order flow can strengthen this concentration. If users or applications send valuable transactions directly to a major builder, smaller builders cannot compete for the same opportunities. Winning more blocks can attract additional private flow, reinforcing the position of already successful builders.
The major risks associated with builder concentration include:
- a small group gaining substantial influence over transaction inclusion;
- censorship becoming easier if dominant builders exclude certain transactions;
- private order flow creating barriers to entry for new builders;
- infrastructure failures affecting a large share of block production;
- sophisticated builders gaining persistent informational advantages;
- MEV revenue becoming concentrated among a limited number of participants.
Competition between builders can reduce some of these risks, but only when participants have realistic opportunities to access transactions and win bids.
This is why Ethereum’s block-building decentralisation cannot be evaluated only by counting active builder organisations. Their market share and access to exclusive order flow are also important.
Builders Under Proposer-Builder Separation
The Builder role is closely connected to Proposer-Builder Separation, but the two terms should not be treated as synonyms.
PBS is the architecture that separates block construction from block proposal. A Builder is the participant performing the construction side of that architecture.
Ethereum’s MEV-Boost ecosystem provides an external implementation of this separation. Builders construct blocks, submit bids through the relevant market infrastructure, and validators can select competitive offers rather than building locally.
Ethereum research has also pursued more protocol-native forms of proposer-builder separation. The objective is to preserve specialised builder competition while reducing dependence on trusted or semi-trusted intermediaries and maintaining censorship resistance.
A major challenge is preventing builders from becoming more powerful than intended. If proposers simply accept the highest-paying block and have no influence over its contents, dominant builders could gain substantial control over transaction inclusion.
Mechanisms such as inclusion lists have therefore been explored to preserve some proposer agency. A proposer could require selected transactions to be included while still allowing a specialist builder to optimise the remainder of the block.
Why the Builder Role Matters
Builders demonstrate how Ethereum block production has evolved from a relatively simple validator task into a specialised economic market.
A validator may have the right to propose a block, but that does not necessarily mean it personally selects and orders every transaction inside that block. Specialised builders can perform the computational and economic optimisation required to construct competitive blocks.
This division of labour can benefit smaller validators because they do not need to operate advanced MEV infrastructure to access competitive block revenue. At the same time, it shifts some centralisation pressure from staking towards the block-building market.
The long-term challenge is therefore balancing efficiency with neutrality. Ethereum benefits from builders competing to create valuable blocks, but it also needs to prevent a small group of builders from becoming unavoidable gatekeepers for transaction inclusion.
A Builder should ultimately be understood as the specialist responsible for transforming available transactions, bundles, and order flow into a complete candidate block. Its influence comes not from the right to finalise Ethereum consensus, but from controlling one of the most economically important stages before a block is proposed: deciding what goes into the block and in what order.