MEV Supply Chain & Proposer-Builder Separation
Understand how maximal extractable value flows through Ethereum's block production network, the centralization risks of current PBS infrastructure, and how enshrined PBS (EIP-7732) will reshape the ecosystem.
Table of Contents
The MEV Supply Chain
The MEV supply chain is a vertically integrated network where value flows from users to searchers, builders, relays, and finally proposers/validators. This supply chain has emerged post-merge as a critical infrastructure layer that now mediates ~90% of Ethereum blocks.
Supply Chain Participants:
Submit transactions; unknowingly source MEV opportunities
Identify profitable opportunities (arbitrage, sandwiching, liquidations); submit bundles to builders
Assemble optimal blocks from bundles + mempool transactions; seal and submit to relays
Validate blocks; manage communications between builders and proposers; enforce censorship policies
Select highest-paying block; include in consensus chain
Key Stat: Total MEV extracted post-merge (Sep 2022 – Jun 2024): 526,207 ETH (~$2.1B at $4K/ETH). MEV-Boost infrastructure now mediates roughly 90% of Ethereum blocks.
MEV Types & Economics
Arbitrage (Most Common)
Exploiting price discrepancies across DEXs. Searchers pay 90%+ of MEV extraction in gas fees.
Sandwich Attacks
Front-run + back-run transactions. Place order before victim, profit from slippage, then exit.
Liquidations
Monitoring lending protocols (Aave, Compound). Execute liquidations when collateral ratios breach thresholds.
Just-in-Time (JIT) Liquidity
Provide liquidity just before a swap executes, capture fees, then exit within same block.
Builder Market (April 2026)
The builder market exhibits extreme concentration. Titan and BuilderNet control 76%+ of block production, raising censorship and centralization concerns.
Understanding this concept is a prerequisite for making informed decisions in DeFi. Most losses in crypto come from misunderstanding the fundamentals.
Builder Market Share & Block Profits
| Builder | Market Share | Blocks | Avg Profit/Block |
|---|---|---|---|
| Titan | 52.16% | 3,437 | 72.99 ETH |
| BuilderNet | 24.63% | 1,623 | 9.55 ETH |
| Quasar | 15.06% | 992 | 5.20 ETH |
| Eureka | 2.41% | 159 | 2.10 ETH |
| Beaverbuild | 1.81% | 119 | 1.85 ETH |
Key Builder Insights:
- •Titan Dominance: 52.16% market share partly driven by exclusive order flow deal with Banana Gun (MEV searcher). Highest block profit average (72.99 ETH).
- •BuilderNet Launch: Launched Nov 2024 by Flashbots + Beaverbuild + Nethermind. Decentralized builder using Trusted Execution Environments (TEEs) to enhance privacy.
- •Profit Disparity: Titan's profit 7.6x higher than BuilderNet, indicating significant competitive advantages (order flow, latency, optimization algorithms).
- •Centralization Risk: Top 2 builders control 76.79% of block production; high barrier to entry due to capital, infrastructure, and order flow requirements.
Relay Market (April 2026)
Relays are critical infrastructure that validate blocks and enforce consensus rules, but the market shows dangerous centralization: only 4 relay operators control 95%+ of market share, and relays operate as unprofitable public goods.
Relay Market Share & Latency (April 2026)
| Relay | Market Share | Latency | Status |
|---|---|---|---|
| Ultrasound | 33.92% | 1ms | Optimized |
| Titan Relay | 24.19% | 3ms | Competitive |
| bloXroute Max-Profit | 14.67% | 3ms | High-perf |
| Aestus | 10.03% | 190ms | MEV-burn |
| bloXroute Regulated | 9.07% | 5ms | Compliant |
| Flashbots | 4.22% | 279ms | Conservative |
| Agnostic | 3.22% | 150ms | Neutral |
Key Relay Insights:
- •Market Concentration: Only 4 relays (Ultrasound, Titan Relay, bloXroute, Aestus) control 82.81% of market share.
- •Latency Matters: Ultrasound dominates with 1ms latency; Flashbots lags at 279ms, contributing to lower market share.
- •Economics Problem: Relays are unprofitable public goods—no direct revenue model. Operators absorb infrastructure costs for ecosystem benefit.
- •Regulatory Compliance: bloXroute Regulated and Flashbots enforce OFAC compliance, creating potential censorship vectors.
Enshrined PBS (EIP-7732)
Enshrined PBS (ePBS) brings proposer-builder separation into the Ethereum protocol layer. Currently a headliner for the Glamsterdam upgrade (targeted for 2026), EIP-7732 eliminates the need for external relays and external validators.
How Enshrined PBS Works:
- 1Builders Prepare
Builders assemble blocks from searcher bundles + mempool txs. Cryptographically seal contents.
- 2Proposers Choose
Proposers receive block headers + commitments. Select highest-paying block WITHOUT seeing inside.
- 3Consensus Inclusion
Selected block included in consensus chain. Transaction contents revealed only after finalization.
- 4Inclusion Lists
Proposers maintain Inclusion Lists (EIP-7547) to enforce censorship-resistant transaction inclusion.
ePBS Benefits:
- ✓Protocol-Level Trust: No external relay trust assumptions; security guaranteed by consensus.
- ✓Sealed Block Contents: Builders' secrets remain hidden from proposers until after finalization, reducing front-running.
- ✓Censorship Resistance: Inclusion Lists force builders to include transactions, combating OFAC compliance.
- ✓Reduced Relay Centralization: Eliminates need for external relay layer; decreases reliance on small set of operators.
- ✓Fairer MEV Distribution: Builders compete on fair basis; eliminates exclusive order flow advantages.
Risks, Challenges & Benefits
Current PBS Risks
- ⚠Builder Centralization: Titan + BuilderNet control 76%+ of blocks; high barriers to entry.
- ⚠Relay Centralization: 4 relays control 95%+ of market; unprofitable, at risk of shutting down.
- ⚠Censorship Risk: Builders can exclude transactions; OFAC compliance reduces financial inclusion.
- ⚠Exclusive Order Flow: Relationships (e.g., Banana Gun ↔ Titan) concentrate MEV advantages.
ePBS Benefits
- ✓Protocol-Native Security: Consensus-backed trust; no external relay vulnerabilities.
- ✓Decentralized Builder Access: Lower barriers for new builders; fair competition.
- ✓Content Hiding Until Finality: Reduces MEV exposure and front-running opportunities.
- ✓Inclusion Lists for Censorship Resistance: Protocol-level guarantee against transaction exclusion.
Frequently Asked Questions
What is MEV and why does it matter?
MEV (Maximal Extractable Value) is the value extracted by network participants by observing and reordering transactions. It matters because it represents significant value that flows outside users' control—526,207 ETH extracted post-merge—and can incentivize censorship and unfair transaction ordering.
Why is PBS necessary?
PBS separates the roles of proposers and builders in block production. This is necessary because builders have superior information (private mempools, bundles) that validators lack. External PBS (via MEV-Boost) currently handles this, but brings external trust assumptions.
What is Titan's Banana Gun deal and why does it matter?
Titan has an exclusive order flow agreement with Banana Gun (a searcher), meaning Titan sees Banana Gun bundles first. This gives Titan a significant advantage in assembling high-value blocks, contributing to its 52% market share. It demonstrates how exclusive relationships concentrate MEV advantages.
When will enshrined PBS (EIP-7732) be deployed?
EIP-7732 is targeted as a headliner for the Glamsterdam upgrade, expected in 2026. However, Ethereum upgrade timelines can shift based on development progress and community consensus.
How do Inclusion Lists (EIP-7547) prevent censorship?
Inclusion Lists allow proposers to specify transactions that MUST be included in blocks. If builders exclude listed transactions, the block is invalid. This forces builders to include transactions even if they incur MEV loss.
Why are relays unprofitable?
Relays operate as public goods: they absorb infrastructure costs (servers, bandwidth, validation) without direct revenue. They're funded by ecosystem goodwill or parent organizations (e.g., Flashbots operates its relay for community benefit). This is unsustainable long-term.
Related Guides
Disclaimer: This guide is for educational purposes only and does not constitute investment advice, financial advice, or recommendations. MEV and PBS are complex technical topics; information is current as of April 2026 and subject to change. Always conduct your own research and consult with experts before making technical or financial decisions. degen0x makes no warranties about accuracy or completeness.
Educational disclaimer: This guide is for informational purposes only and does not constitute financial advice. Crypto involves significant risk — do your own research before making any decisions. Learn more about our team.
Educational disclaimer: This guide is for informational purposes only and does not constitute financial advice. Crypto involves significant risk — do your own research before making any decisions. Learn more about our team.