Flashbots Launches BuilderNet To Combat Ethereum Censorship

According to Cointelegraph, blockchain infrastructure firm Flashbots has introduced BuilderNet, a decentralized block-building network on Ethereum, aiming to address censorship issues and alleviate centralization concerns. BuilderNet, which went live on November 26, seeks to enable multiple parties to collaborate in block construction, a significant development as approximately 88% of Ethereum blocks have recently been built by Beaverbuild and Titan Builder. This initiative is seen as a crucial step in eliminating censorship and exclusive order flow deals on Ethereum, as highlighted by Coinbase's protocol specialist Viktor Bunin. Flashbots' product manager Shea Ketsdever announced that the initial release of BuilderNet is now operational on Ethereum's mainnet and will eventually serve as a drop-in solution for decentralized sequencing on layer 2s. Ethereum's current block construction method, known as proposer-builder separation, involves builders creating blocks for proposers to review, often selecting the most profitable one. However, this specialization has led to centralization issues, as noted by Ethereum co-creator Vitalik Buterin. Flashbots aims to distribute the block-building process across a broader network to prevent systemic chokepoints that could lead to censorship and rent extraction from users. Data from MEV Watch indicates that nearly 45% of Ethereum blocks have enforced censorship to comply with the United States Office of Foreign Assets Control (OFAC) over the past five months. While most transactions are eventually included in subsequent blocks, the delay allows block builders more time to extract user revenue through sandwich attacks. BuilderNet operates on a multioperator system, where multiple parties contribute to block building within a Trusted Execution Environment, enabling protocols and users to verify transactions. Maximal Extractable Value (MEV), typically extracted by reordering transactions, is redistributed back to users, with block builders compensated through a refund rule. The introduction of BuilderNet could significantly impact Titan Builder, which has reportedly accumulated over $40 million in hidden profit from MEV-Boost, according to Austin King, a founder of Omni Network. The first release of BuilderNet is managed by Flashbots, Beaverbuild, and Ethereum infrastructure firm Nethermind. Future iterations of BuilderNet are expected to become more permissionless, enhancing censorship resistance and decentralization. Initially, Flashbots was developing a different decentralized block-building solution called Single Unifying Auctions for Value Expression (SUAVE) in 2022, but a full-scale rollout did not occur.