Definition ∞ A block-by-block auction is a competitive process where network participants bid for the right to construct or propose the next block in a blockchain. This mechanism determines which entity earns the privilege to order and process transactions for a given block. It represents a market-driven approach to block production.
Context ∞ This auction model is increasingly relevant in advanced blockchain architectures, particularly those with proposer-builder separation. Such systems influence the economic dynamics for block producers and can impact transaction ordering, potentially introducing complexities related to fair access and value extraction within the network.
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