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This paper analyzes the centralization of Ethereum's builder market under Proposer-Builder Separation (PBS), arguing that prior work overlooks the behavioral and economic roles of Exclusive Order Flows (EOFs) and non-atomic MEV. Using KL divergence and supervised learning on Ethereum transaction data (Sept 2023-Aug 2025), the authors identify 75 EOFs and 322 non-atomic MEV flows, finding they account for a large portion of builder revenue. Longitudinal analysis reveals that while EOFs initially drove dominance, incumbents now maintain market share through network effects, suggesting builder centralization is inherent to the PBS framework.
Ethereum builder centralization isn't just about who has the best order flow, but also about how network effects let incumbents decouple from needing exclusive deals.
This study investigates the rapid centralization of the Ethereum builder market under the Proposer-Builder Separation (PBS) architecture. We argue that existing research, by focusing predominantly on influential order flows, lacks a comprehensive evaluation of order flow behavioral patterns and economic purposes. To address this gap, we analyze Ethereum transactions from September 2023 to August 2025 to characterize Exclusive Order Flows (EOFs) and non-atomic Maximal Extractable Value (MEV) -- the missing components corresponding to these behavioral and economic dimensions, respectively. We introduce a novel exclusivity metric based on Kullback-Leibler divergence and employ supervised learning to identify 75 EOFs and 322 non-atomic MEV flows, which account for 71\% and 23\% of trading-related builder revenue. A longitudinal analysis of builder strategies across these dimensions delineates the market's evolution into four distinct eras, revealing that while EOFs were instrumental in establishing early dominance, incumbents have since decoupled market share from immediate EOF dependency by leveraging entrenched network effects. Ultimately, we conclude that builder centralization is an emergent property of the PBS framework itself, as the architecture systematically violates the fundamental prerequisites of a competitive market.
Tsinghua AI