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Block Builder Centralization

Definition ∞ Block builder centralization describes the concentration of block production power within a small number of entities. These entities select and order transactions to form new blocks on a blockchain. A higher degree of centralization means fewer participants control the sequence and inclusion of transactions. This concentration can impact network fairness and censorship resistance.
Context ∞ The issue of block builder centralization is a significant topic in blockchain governance and security, particularly for proof-of-stake networks. Debates often focus on its potential to reduce decentralization, leading to concerns about censorship, transaction reordering, and potential manipulation of network activity. Monitoring the distribution of block production over time remains a critical indicator of network health.

A futuristic, high-performance mechanism showcases a vibrant blue energy conduit at its core, suggesting intense computational activity. A sleek, segmented white module on the left channels this energy into a larger, intricately designed structure composed of metallic and translucent blue elements. This central component, reminiscent of a validator node or a decentralized autonomous organization DAO engine, illuminates with internal glow, indicating active smart contract execution. The robust design implies a system engineered for high-throughput transaction finality within a distributed ledger technology DLT environment, facilitating complex consensus mechanism operations.

→Blockchain Systemic Risk

→Transaction Ordering Fairness

→Oligopoly Equilibrium

Game Theory Reveals Private Orderflow Centralizes Block Building Auctions

Game theory proves private orderflow and latency asymmetries drive MEV-Boost to an oligopoly equilibrium, requiring new trustless orderflow mechanisms.