Enshrined Proposer Builder Separation in the presence of Maximal Extractable Value
Yitian Wang, Yebo Feng, Yingjiu Li, Jiahua Xu
TL;DR
This paper investigates the fairness and decentralization implications of enshrined Proposer Builder Separation (ePBS) in PoS Ethereum by marrying a formal agent-based framework with mathematical analysis and calibrated simulations. It shows that while ePBS reduces proposer-side centralization, it markedly concentrates block construction among MEV-seeking builders and concentrates around proposers (approximately 95% of block value), exacerbating MEV-driven manipulation. The study demonstrates that re-staking and vertical integration amplify long-term centralization under ePBS, and that epbs tends to worsen transaction ordering fairness compared to PoS. These findings indicate that embedding PBS into the consensus layer does not resolve centralization and fairness concerns and suggest the need for novel mechanism designs to mitigate MEV and preserve decentralization. The work provides a concrete, quantitatively grounded assessment of ePBS and offers a baseline for future mechanism-design research targeting balanced decentralization and MEV resilience.
Abstract
In blockchain systems operating under the Proof-of-Stake (PoS) consensus mechanism, fairness in transaction processing is essential to preserving decentralization and maintaining user trust. However, with the emergence of Maximal Extractable Value (MEV), concerns about economic centralization and content manipulation have intensified. To address these vulnerabilities, the Ethereum community has introduced Proposer Builder Separation (PBS), which separates block construction from block proposal. Later, enshrined Proposer Builder Separation (ePBS) was also proposed in EIP-7732, which embeds PBS directly into the Ethereum consensus layer. Our work identifies key limitations of ePBS by developing a formal framework that combines mathematical analysis and agent-based simulations to evaluate its auction-based block-building mechanism, with particular emphasis on MEV dynamics. Our results reveal that, although ePBS redistributes responsibilities between builders and proposers, it significantly amplifies profit and content centralization: the Gini coefficient for profits rises from 0.1749 under standard PoS without ePBS to 0.8358 under ePBS. This sharp increase indicates that a small number of efficient builders capture most value via MEV-driven auctions. Moreover, 95.4% of the block value is rewarded to proposers in ePBS, revealing a strong economic bias despite their limited role in block assembly. These findings highlight that ePBS exacerbates incentives for builders to adopt aggressive MEV strategies, suggesting the need for future research into mechanism designs that better balance decentralization, fairness, and MEV mitigation.