  Maximal extractable value (MEV) in which block proposers unethically gain
profits by manipulating the order in which transactions are included within a
block, is a key challenge facing blockchains such as Ethereum today. Left
unchecked, MEV can lead to a centralization of stake distribution thereby
ultimately compromising the security of blockchain consensus. To preserve
proposer decentralization (and hence security) of the blockchain, Ethereum has
advocated for a proposer-builder separation (PBS) in which the functionality of
transaction ordering is separated from proposers and assigned to separate
entities called builders. Builders accept transaction bundles from searchers,
who compete to find the most profitable bundles. Builders then bid completed
blocks to proposers, who accept the most profitable blocks for publication. The
auction mechanisms used between searchers, builders and proposers are crucial
to the overall health of the blockchain. In this paper, we consider PBS design
in Ethereum as a game between searchers, builders and proposers. A key novelty
in our design is the inclusion of future block proposers, as all proposers of
an epoch are decided ahead of time in proof-of-stake (PoS) Ethereum within the
game model. Our analysis shows the existence of alternative auction mechanisms
that result in a better (more profitable) equilibrium to players compared to
state-of-the-art. Experimental evaluations based on synthetic and real-world
data traces corroborate the analysis. Our results highlight that a rethinking
of auction mechanism designs is necessary in PoS Ethereum to prevent
disruption.
