Originally published on: November 27, 2024
Blockchain infrastructure company Flashbots has introduced BuilderNet, a decentralized block-building network on Ethereum, aiming to tackle censorship and address a major bottleneck in the network.
Launched on Nov. 26, BuilderNet allows for collaborative block-building among multiple parties to eliminate centralization. Currently, a large percentage of Ethereum blocks are created by a select few builders, leading to concerns about censorship and exclusive order flow deals.
According to Coinbase’s protocol specialist Viktor Bunin, this initiative is a game-changer in addressing censorship issues on Ethereum. Flashbots’ product manager Shea Ketsdever highlighted that BuilderNet’s first release is already live on Ethereum’s mainnet, with plans to expand to decentralized sequencing on layer 2s in the future.
Ethereum has faced challenges due to the centralization of block construction, where builders create blocks for proposers to select the most profitable one. To combat this, Flashbots aims to distribute the block-building process across a network of participants to prevent chokepoints that could invite censorship and rent extraction.
Recent data shows that nearly half of all Ethereum blocks have been subjected to censorship requirements to comply with regulations. BuilderNet’s multi-operator system ensures that transactions are validated by multiple parties in a Trusted Execution Environment, offering enhanced security and censorship resistance.
With BuilderNet, Flashbots plans to redistribute maximal extractable value back to users while compensating block builders through a refund rule. This shift in approach could impact traditional block builders like Titan Builder, which has accumulated significant profits from transaction reordering.
Operated by Flashbots, Beaverbuild, and Nethermind, the first iteration of BuilderNet marks a significant step towards decentralization and censorship resistance on Ethereum. Future releases will further enhance the network’s permissionless design to bolster security and decentralization efforts.
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