What is a Block Builder?
Builders are highly specialized individuals or entities that assemble blocks from various types of transactions, such as public, private, bundled transactions, etc.
The Role of Builders?
Builders interact with the public mempool (also they are usually running their own), utilizing algorithms and simulation-based techniques to create an optimal bundle of transactions in a block template (referred to as:
ExecutionPayload) with the goal of sending that block into the blockchain and extracting MEV. Builders use relays to compete in a bidding process to acquire blockspace from validators and ensure inclusion of their execution payloads in proposed blocks.
In the PoN Relay, builders don't send full blocks; They send blind blocks. The relays are kept blind to the contents of the blocks. To safeguard the PoN Relay against malicious actors, builders generate encrypted messages and commitments to the
payoutPool using the Restricted Partially Blind Signature service. Builders then transmit the block bundles with payment a signature to the relay and request the block header with a signature from the proposer. The builder submits the block to the consensus layer using the proposer's signature.
How do Builders Pay Block Proposers?
The builder assigns the
payoutPooladdress as the
feeRecipientfor the payload block header they are creating.
The builder adds a transaction that pays ETH to the PBS-Smoothing pool
payoutPooladdress at the end of their proposed block which ensures block rewards to the proposers.
Time in Proof-of-Stake (PoS) Ethereum is divided into 12 second long slots and epochs that consist of 32 slots.
For each slot, each builder is allowed to send two blocks. One at the start and then one more block after, meaning the submission is rate-limited to 10 blocks per minute.
Minimal Deposit to Participate
Builders must lock the minimal deposit amount of ETH in the builder registry contract to participate in the PBS-Smoothing pool. Penalties for violating PBS rules are paid using these locked funds. Builders can be penalized and removed, but can rejoin the pool if they deposit more ETH to the builder registry contract.
If the minimal stake amount for builders increases above the value they have provided, their requests will be discarded by the relay if they have no minimal stake. This is not considered a violation. They are not kicked off the network.
What is the Minimal Stake Amount?
The minimal stake amount is the highest value between the specified STAKE AMOUNT and the average of the latest 100 blockspace payments in the payout pool.