Breaking Down the Problem
Flashbots just launched BuilderNet, a new decentralized system to tackle a big issue on Ethereum: block building is too centralized. Two companies, Beaverbuild and Titan Builder, have been responsible for 88% of Ethereum’s blocks lately, creating concerns about censorship and unfair control over the network.
Why This Matters
BuilderNet, which went live on Nov. 26, is designed to make block building more open. It lets multiple participants work together to build blocks, reducing the risk of censorship and giving users more control. Coinbase’s Viktor Bunin called this move “massive,” saying it could disrupt exclusive deals that hurt decentralization.
Flashbots’ Shea Ketsdever confirmed that BuilderNet is already live on Ethereum’s mainnet and will soon support decentralized systems for Layer 2 networks.
How Ethereum’s Blocks Are Built
Ethereum uses a process where builders create blocks, and proposers choose the most profitable one. While efficient, this setup has led to centralization. In fact, 45% of Ethereum blocks in the past five months have been censored to comply with U.S. regulations, according to MEV Watch.
BuilderNet’s Fix
BuilderNet works through a multi-operator system, meaning several parties collaborate to build blocks in a secure environment. It changes how profits, called Maximal Extractable Value (MEV), are distributed. Instead of block builders keeping all the profit, the value is shared with users while builders still get compensated.
This could hurt companies like Titan Builder, which reportedly earned $40 million in hidden profits. BuilderNet is currently operated by Flashbots, Beaverbuild, and Nethermind, but Flashbots plans to make it more open in future updates to ensure it’s even more decentralized.
The Bigger Picture
This isn’t Flashbots’ first attempt at fixing block building. They previously worked on a similar system called SUAVE in 2022, but it never fully launched. With BuilderNet, they’re doubling down on their commitment to making Ethereum more fair and decentralized.