Flashbots Migrates To Decentralized Block Production Software, BuilderNet

Flashbots, a research and development team specializing in maximal extractable value (MEV) infrastructure, has adopted decentralized infrastructure to facilitate Ethereum block production.

On Dec. 8, Flashbots announced it had deprecated its centralized block building infrastructure and migrated orderflow onto its decentralized BuilderNet software, which was deployed on Nov. 26.

“Block building must be made decentralized, uncensorable, and neutral,” Flashbots said. “BuilderNet will make Ethereum more resilient by introducing a neutral way for many parties to share orderflow and collaborate in building blocks.”

Flashbots will continue to host a few instances of its centralized architecture as backups to ensure continuity should BuilderNet encounter any issues during its alpha period.

The news comes as the centralization of Ethereum block production has attracted increasing scrutiny from researchers in recent months.

In October, Vitalik Buterin, Ethereum’s chief scientist, flagged that just two block proposers select the contents of roughly 88% of Ethereum blocks, posing a centralization threat to the network.

Buterin proposed that the task of block production could be distributed across a greater number of entities to further decentralize the process. Buterin added that Ethereum could also employ encrypted mempools or an auction mechanism to diversify block production.

Flashbots and MEV

Flashbots operates MEV-Boost, pioneering software facilitating block production for Proof of Stake Ethereum.

MEV-Boost separates block proposers from builders in a bid to mitigate the impacts of MEV — which describes validators reordering blocks and transactions in order to extract the maximum allowable slippage associated with on-chain transactions.

According to Flashbots, MEV operators extracted more than $655 million from September 2020 until Ethereum transitioned to Proof of Stake consensus on Sept. 15, 2022. Block proposers extracted 526,207 ETH ($1.95 billion at current prices) from Sept. 15, 2022, until June 9, 2024, after which data is not available.

While Flashbots accounted for more than 70% of Ethereum blocks in November 2022, its market share slipped to a low of 11% in June, according to The Block.