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Ethereum Block Building: The Hidden Economy Behind Every Transaction
- Block Building in Ethereum plays a crucial role in including transactions in blocks, affecting network efficiency and decentralization.
- The evolution of Ethereum Block Building involves MEV, Proposer Builder Separation, and changes in the validator selection process.
- Ethereum organizes time into slots and epochs, where validators are shuffled after each epoch for decentralization and security.
- Committees in Ethereum comprise validators randomly assigned per epoch to validate blocks efficiently and fairly.
- Builders construct blocks optimized for MEV opportunities, while Proposers (Validators) select the most profitable blocks.
- MEV extraction involves strategies like front-running, back-running, and sandwich attacks, impacting revenue in block building.
- Pre-PBS, validators controlled block construction, leading to MEV centralization and inefficient block space utilization.
- Post-PBS, Proposer-Builder Separation aims to address centralization risks by splitting block production responsibilities.
- Searchers scan the mempool for MEV opportunities, Builders construct optimized blocks, and Relays facilitate block selection.
- Challenges include centralization risks among builders and trust issues with off-chain MEV relays in the Ethereum block building ecosystem.
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