Block builder incentives are the rewards offered to entities that assemble transactions into blocks on a blockchain. These incentives typically comprise transaction fees and protocol-issued block rewards. Their purpose is to motivate builders to perform the computational work required for network operation and security. Effective incentives are crucial for maintaining network integrity and decentralization.
Context
The discussion around block builder incentives frequently concerns their influence on Miner Extractable Value (MEV) and the centralization risks within proof-of-stake systems. Optimizing these reward structures is a key area of research to ensure equitable and robust blockchain performance. Future developments will likely focus on mechanisms that distribute MEV more fairly and reduce builder dominance.
A new axiomatic framework formalizes Maximal Extractable Value using an abstract blockchain model, enabling provable security guarantees for mechanism design.
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