Definition ∞ A block building auction is a competitive process where network participants bid to create and propose the next block of transactions on a blockchain. Builders gather transactions from the mempool and arrange them into a block structure. The highest bidder typically earns the right to submit this block for validation by a proposer. This system helps optimize transaction ordering and inclusion.
Context ∞ Block building auctions are a central element in the operation of certain proof-of-stake blockchains, particularly in the context of Maximal Extractable Value (MEV). The ongoing discussion concerns the fairness and transparency of these auctions and their potential for centralizing block production. Monitoring this mechanism helps understand network efficiency and validator incentives.
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