PBS Mechanism Design

Definition ∞ PBS mechanism design, or Proposer-Builder Separation mechanism design, refers to the architectural approach in blockchain protocols that separates the roles of proposing a new block and building its contents. A builder assembles transactions into an execution payload, optimizing for Maximal Extractable Value (MEV), while a proposer merely selects a block header from a builder. This separation aims to mitigate MEV centralization risks and improve network decentralization. It is a critical development for proof-of-stake systems.
Context ∞ The implementation and refinement of PBS mechanism design are central to current efforts to enhance the decentralization and censorship resistance of prominent proof-of-stake blockchains, particularly Ethereum. News reports frequently detail the technical specifics, the economic implications for validators and builders, and the ongoing debates about its effectiveness in distributing power. This design choice is a key factor in the long-term health of these networks.