Block building refers to the process by which network participants, typically miners or validators, collect and organize transactions into a new block for addition to the blockchain. This activity involves selecting pending transactions from the mempool and ordering them according to specific rules, often prioritizing those with higher fees. The completed block is then proposed to the network for verification and inclusion. This fundamental operation maintains the integrity and progression of a distributed ledger.
Context
The state of block building is currently undergoing significant changes, particularly with the transition of many networks to Proof-of-Stake consensus mechanisms. A key debate concerns the centralization risks associated with block proposers or builders, especially regarding transaction ordering (Maximal Extractable Value, or MEV). Future developments will likely involve separation of block building from block proposing roles to enhance decentralization and fairness.
Formalizing MEV extraction as a three-stage game of incomplete information proves that Bertrand-style competition harms system welfare, necessitating cryptographic transaction ordering.
Analyzing threshold encrypted mempools reveals that cryptographic privacy shifts MEV risk to new, undetectable forms of decryptor collusion and information asymmetry
This new layer decouples rollup execution from transaction ordering, using a BFT consensus to ensure fair, decentralized sequencing and atomic cross-chain state transitions.
A new two-tiered architecture incorporates publicly verifiable decryption, resolving the censorship vulnerability inherent in existing block-building separation models.
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