In the previous articles, I discussed Ethereum’s main problems like scalability, privacy, or censorship related to MEV and the developer’s remedies for that. Today we have to come back to all of that slightly because one of the main topics of the discussion around the Ethereum block currently is a feature or ideology called PBS. Ethereum Foundation is putting a lot of effort lately into the research around that.
To make it clear let’s remind each other that in Ethereum after the merge, validators are responsible for creating and broadcasting blocks. They gather transactions in bundles that they have heard through a gossip network, put them in the block, and send them to their peers in the blockchain.

Proposer-builder separation is dealing with the fact that as the protocol is becoming more complex, block proposals(validators) may not be able to do everything they do now.
PBS aims to optimize resource utilization and improve the network’s performance by dividing the roles of block creation and validation.
Those roles are divided into builders and proposers.
Block builders become responsible for creating blocks and offering them to the block proposer in each slot. The block proposer cannot see the contents of the block, they simply choose the most profitable one, paying a fee to the block builder before sending the block to its peers. Let’s see how it can help the entire ecosystem with a few categories below.

Even though it may not eliminate MEV-related issues entirely it will change the dynamics of how it is redistributed.
Since block builders are responsible for transaction ordering and inclusion, they may develop new strategies or promote increased competition that could result in more efficiency and fairer distribution of MEV across the network. Another factor is that maximizing benefits from MEV extraction is limited to the ones with technical knowledge and specific software attached to the validator. It comes to the conclusion that individuals will lose this battle to the institutional entities and staking rewards will not be equal at all. PBS is going to solve this technical difficulty because the reward from MEV extraction is distributed in the following way:
Block builders are doing sophisticated MEV extraction and are offering blocks to block proposers which ironically are getting rewards from MEV extraction.
This means that even if a small pool of specialized block builders dominates MEV extraction, the reward for it could go to any validator on the network, including individual home stakers.

As we will split responsibilities into two, it should be more difficult to censor transactions for the block builder. In this case, the block proposer could be working as a censorship protector.

Case study: A lot of highly influential entities could pressure validators to censor specific transactions with specific addresses. TBS is preventing that because block proposers will not know which transactions they are broadcasting in their blocks.

Encrypted mempools are the highly anticipated feature responsible for this as well. The fundamentals behind this are as follows:
1. Allow users to submit encrypted transactions.
2. Block producers commit to these transactions before decrypting them.

This way we could theoretically prevent frontrunning of the trade if we cannot see transactions and it would be difficult to censor transactions if every one of them is encrypted(hypothetically).

The question is arising, how to get decryption without being dependable on anybody, specifically on the user side? Here could come with help Flashbots Protect and SUAVE.

Encrypted mempools are a magical piece of technology however it falls behind our main topic. Let’s proceed further.

Out of the three topics mentioned in the beginning, scalability is the last one. The idea behind danksharding was mentioned already on this blog before however, it is worth highlighting its reliability on PBS.
Sharding is a technique to scale the blockchain by splitting it into multiple smaller chains, or “shards,” that can process transactions and smart contracts independently. Each shard operates parallel to others, allowing for a significant increase in transaction throughput.
While Danksharding focuses on increasing the overall capacity of the network by processing transactions across multiple shards, PBS aims to optimize resource utilization and improve the network’s performance by dividing the roles of block creation and validation. Both characters are going together in the same direction head to head.