Proposer loss mitigation refers to strategies and mechanisms designed to reduce financial penalties or missed rewards for block proposers in blockchain networks. In systems with Proposer-Builder Separation (PBS), proposers might face risks such as a builder withholding a valid block or submitting a less optimal one. Mitigation efforts aim to ensure proposers are fairly compensated and not unduly penalized due to the actions of other network participants. This protects the economic stability of the proposing role.
Context
Discussions around proposer loss mitigation are particularly relevant in the context of PBS implementation, where the proposer’s role becomes distinct from the builder’s. News articles often analyze different protocol designs and economic incentives aimed at safeguarding proposers from adverse scenarios. Ensuring robust mitigation is crucial for maintaining a diverse and active set of block proposers, thereby supporting network decentralization.
An economic model reveals that Proposer-Builder Separation, using Execution Tickets, concentrates MEV extraction among high-capital buyers, fundamentally challenging decentralization.
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