Decentralization of Ethereum's Builder Market

Sen Yang, Kartik Nayak, Fan Zhang

IEEE S&P 2025

arXiv Code

TL;DR by AI

Empirical analysis shows builder centralization in Ethereum harms decentralization and necessitates supply chain changes.

Abstract

Blockchains protect an ecosystem worth more than $500bn with strong security properties derived from the principle of decentralization. Is today’s blockchain decentralized? In this paper, we empirically studied one of the least decentralized parts of Ethereum, its builder market.

The builder market was introduced to fairly distribute Maximal Extractable Values (MEV) among validators and avoid validator centralization. As of the time of writing, three builders produced the vast majority (more than 80%) of blocks in Ethereum, creating a concerning centralization factor. However, the community believes that such centralization is okay, arguing that builder centralization will not lead to validator centralization. In this empirical study, we interrogate the causes and implications of builder centralization and challenge this belief that it is acceptable.

Our main finding is that builder centralization has led to a significant loss by validators and, if left uncontrolled, could lead to validator centralization. Moreover, MEV mitigation solutions slated for adoption are affected too because they rely on the builder market as an MEV oracle, which is made inaccurate by centralization.

Our investigation revealed two reasons behind builder centralization. We propose a structural change to the existing MEV supply chain and a solution based on the new supply chain structure. However, future work is required to analyze if the new supply chain structure is sustainable in the long term, which we leave open.

Highlights
Publicity
  • Guest lecture at Berkeley DeFi MOOC.
  • Invited talk at CBER Crafting the Cryptoeconomy Conference. PPTX
  • Invited talk at Decentralized Science (DeSci) Seminar, University of Sydney (Remote).
  • Invited talk at Science of Blockchain Conference 2024 (SBC'24), New York, NY. Video
  • Invited talk at IC3 Blockchain Camp, New York, NY.
  • Invited talk at EC24 Workshop on Blockchains and Decentralized Finance.

BibLaTeX

@inproceedings{yangDecentralizationEthereumsBuilder2025,
  title = {Decentralization of {{Ethereum}}'s {{Builder Market}}},
  author = {Yang, Sen and Nayak, Kartik and Zhang, Fan},
  date = {2025-05-01},
  pages = {1512--1530},
  publisher = {IEEE Computer Society},
  doi = {10.1109/SP61157.2025.00157},
  url = {https://www.computer.org/csdl/proceedings-article/sp/2025/223600b456/26hiUkhZyfK},
  urldate = {2025-06-19},
  eventtitle = {2025 {{IEEE Symposium}} on {{Security}} and {{Privacy}} ({{SP}})},
  isbn = {979-8-3315-2236-0},
  langid = {english}
}