Briefing
The research addresses the critical, unresolved tension between a public blockchain’s need for credible neutrality (censorship resistance) and the increasing pressure for regulatory compliance within its consensus mechanism. The foundational breakthrough is a statistical and game-theoretic model that analyzes transaction inclusion behavior across the Proposer-Builder Separation (PBS) supply chain → specifically builders, relays, and validators → revealing a diverse, incentive-driven compliance landscape. The model demonstrates that the current PBS architecture, driven by Maximal Extractable Value (MEV) incentives, grants disproportionate influence to builders and relays over transaction inclusion, compromising the validator’s role as a neutral arbiter. The single most important implication is that the current Proof-of-Stake design creates an inherent, quantifiable tension where achieving full compliance is impossible without eliminating credible neutrality, suggesting a fundamental design flaw in the cryptoeconomic model.
Context
Before this work, the debate over censorship resistance in Proof-of-Stake was largely qualitative, focusing on theoretical attack vectors or political statements. The prevailing theoretical challenge was the “compliance dilemma” → how a decentralized network could satisfy global regulatory mandates, such as sanctioning specific addresses, without sacrificing its core tenet of credible neutrality. The existing Proposer-Builder Separation (PBS) design was introduced to mitigate Maximal Extractable Value (MEV) centralization, yet this structure inadvertently created new, powerful chokepoints → the relays and builders → whose profit-maximizing behavior could be leveraged for or against censorship.
Analysis
The paper’s core mechanism involves applying statistical anomaly detection to on-chain data to map the transaction inclusion behavior of different actors against a baseline of “full compliance” and “full neutrality.” This approach quantifies the degree of compliance behavior, moving beyond a binary “censored/not-censored” state. It fundamentally differs from previous models by demonstrating that the economic incentives tied to MEV, which are magnified by the PBS design, create a strong gravitational pull toward compliance for the most profitable actors, specifically the block builders and relays. This finding shows that partial sanction enforcement is not a stable or effective equilibrium and that the current design systematically compromises the system’s intended neutrality.
Parameters
- Core Tension Metric → Partial enforcement of sanctions is insufficient to eliminate sanctioned transactions.
- Actor Influence Shift → Proposer-Builder Separation enhances the capacity of builders and relays to influence transaction inclusion.
- Validator Role → Validators’ influence is mostly limited to their proposer tasks, diminishing their role in the neutrality debate.
Outlook
This research opens new avenues for mechanism design focused on decoupling transaction ordering from the economic incentives of block production. Future work will concentrate on designing credibly neutral pre-confirmation or decentralized sequencing protocols that eliminate the chokepoint created by centralized block builders and relays. The long-term application is the development of a next-generation Proof-of-Stake architecture that can mathematically prove its censorship resistance while providing a clear, non-coercive path for regulatory interaction without compromising foundational principles.
Verdict
This work provides the essential formal framework to understand and mitigate the systemic cryptoeconomic risks that threaten the core principle of credible neutrality in Proof-of-Stake architectures.
