Ethereum’s next major upgrade could move proposer-builder separation into the protocol itself, changing how blocks are assembled, how MEV is managed and how much influence private infrastructure has over the network.
Ethereum developers are advancing Glamsterdam, a proposed network upgrade that could make one of the blockchain’s most important market structures part of its consensus rules. The central idea is enshrined proposer-builder separation, or ePBS, a design intended to separate the validator that proposes a block from the specialized company that constructs it.
That separation already exists in practice. Most Ethereum validators use external software and relay networks to receive completed blocks from builders. Glamsterdam could replace much of that arrangement with native protocol rules, reducing the role of third-party coordination while giving Ethereum a more formal system for handling maximum extractable value, known as MEV.
The change reaches far beyond validator software. It could affect how transactions are ordered, how decentralized applications compete for block space, how solo stakers earn rewards and how much power a small group of builders holds over the network.
Supporters see ePBS as an overdue modernization of Ethereum’s block production process. Critics see a new layer of complexity that could make the protocol more dependent on specialized infrastructure and governance decisions. The debate is therefore not only about efficiency. It is about whether Ethereum can manage a highly competitive block-building market without turning its neutral settlement layer into a tightly administered marketplace.
From one validator role to a specialized market
Before proof of stake, an Ethereum miner generally performed the full work of selecting transactions, assembling a block and submitting it to the network. The transition to proof of stake preserved that basic relationship in the protocol. A validator selected to propose a block was still responsible for constructing it.
The growth of MEV changed the economics.
MEV refers to the value available from controlling the order, inclusion or exclusion of transactions. It can come from arbitrage between decentralized exchanges, liquidations in lending protocols, token launches, back-running trades and other forms of transaction sequencing. As decentralized finance became more active, identifying and capturing those opportunities required increasingly sophisticated systems.
Specialized builders emerged to construct optimized blocks. Validators, meanwhile, could outsource block construction through tools such as MEV-Boost. A validator would typically receive candidate blocks through relays, select one and propose it to the network. The builder would compete to create the most valuable block and pay a portion of that value to the validator.
This arrangement became known as proposer-builder separation, even though it was not originally embedded in Ethereum’s core protocol. It created a market in which validators could access sophisticated block construction without operating their own trading and auction infrastructure.
The system also exposed a structural weakness. Relays became trusted intermediaries that attested, in effect, that a builder’s block was valid and that payment conditions had been met. A relay could not rewrite Ethereum’s consensus rules, but it could influence which blocks reached validators. Outages, censorship policies and operational concentration therefore became meaningful risks.
ePBS is intended to move the essential guarantees of that marketplace into Ethereum’s protocol. The proposer would continue to be the validator responsible for publishing the block, while a builder would commit to the contents and value of a block under rules enforced by the network. The exact mechanics remain subject to development and testing, but the goal is to reduce the need for trusted relays and make the proposer-builder relationship verifiable through consensus.
That is a significant change in Ethereum’s architecture. It would acknowledge that specialized block builders are not a temporary workaround. They are now a permanent part of the network’s economic structure.
What Glamsterdam could change
For validators, ePBS could make block production more standardized. A validator would not need to maintain a profitable search operation or negotiate directly with multiple builders. Instead, the protocol would define how a builder’s block is selected, how the proposer receives payment and what happens if a participant fails to deliver.
This could improve reliability for staking operators that currently depend on a patchwork of middleware. It could also reduce the operational burden of choosing relays and managing fallback configurations. Large staking providers may welcome a system that is easier to automate across thousands of validators.
Solo stakers could benefit in theory. Native separation could give an individual validator access to the same builder market used by professional staking companies. The validator would not need to compete on trading infrastructure to receive a competitive block reward.
In practice, however, the outcome will depend on the software around ePBS. If participation requires complex networking, rapid data exchange or specialized hardware, solo stakers could remain at a disadvantage. Protocol neutrality does not automatically produce equal economic access. A design may be open to everyone while still favoring operators with better connectivity, larger capital reserves and more sophisticated monitoring.
For builders, Glamsterdam could create both opportunity and pressure. Builders may gain a clearer and more predictable route to validators. At the same time, they could face stricter obligations around bids, delivery, data availability and payment. The ability to submit a profitable block would no longer be enough. Builders would need to meet protocol-defined deadlines and prove that their commitments are valid.
That could favor companies with substantial engineering resources. Building blocks is already a competitive business that combines mempool access, trading strategies, private order flow, simulation systems and infrastructure in multiple data centers. Native separation may remove some intermediary costs, but it will not eliminate the economies of scale that drive concentration.
Users will experience the upgrade indirectly. They may not notice a new wallet feature or a faster confirmation screen. The effects could appear in execution quality, censorship resistance, failed transactions and the distribution of MEV.
A more competitive builder market could improve the value returned to validators while reducing the ability of any one intermediary to filter transactions. Better coordination could also make it easier to include transactions that are difficult to process under current auction dynamics.
The opposite is possible if builder concentration increases. A small number of builders with privileged order flow could gain greater influence over which transactions are seen and how they are arranged. Users may still be able to submit transactions, but their practical access to fair ordering could depend on private infrastructure that remains outside direct protocol control.
The relay problem is real, but not simple
The case for ePBS begins with a genuine weakness in the current model. Relays sit between builders and validators, and their software must coordinate high-value auctions under severe time constraints. Any important component that is not governed by Ethereum’s consensus rules can become a point of failure.
Reliance on relays also makes it harder to reason about the system’s trust assumptions. Validators may use several relays, but the market can still become concentrated around a limited group of operators. Relays can impose policies on the blocks they transmit, including policies related to transaction censorship. A validator that wants to maximize rewards may have an incentive to connect to the most profitable relays, even if those relays have controversial filtering practices.
Enshrining the process could make these assumptions more visible and enforceable. Instead of relying on informal agreements between builders, relays and staking operators, Ethereum would specify what constitutes a valid commitment and what penalties or fallback mechanisms apply when the process breaks.
Yet protocol enforcement comes with a cost. Every rule added to consensus must be implemented by multiple clients, tested under adversarial conditions and maintained for years. A relay can be replaced or upgraded by its operators. A consensus mechanism cannot be changed casually without coordinating the entire network.
That distinction matters because block production happens at the boundary between consensus and an extremely fast market. Ethereum must give participants enough time to exchange block data, verify commitments and propagate a proposal. If the protocol requires too much information to move within a slot, missed proposals could increase. If it requires too little verification, builders may gain room to make unreliable or misleading commitments.
The design therefore has to balance economic efficiency against the conservative engineering practices expected from a settlement network. Faster auctions may improve rewards, but a single timing assumption that works in a well-connected data center may fail for validators operating from homes, smaller regions or less reliable networks.
Builder concentration is the central economic risk
The most serious criticism of ePBS is not that it formalizes builders. It is that formalization could make their power more durable.
Builder markets tend to reward scale. A large builder can operate more servers, model more transactions, absorb temporary losses and maintain relationships with trading firms and decentralized applications. It can also invest in private order flow, which gives it access to transactions before they reach the public mempool.
When several sources of advantage reinforce one another, the market can narrow quickly. A builder with better information creates more profitable blocks. More profitable blocks attract more validators. More validator access improves the builder’s ability to win future auctions. That feedback loop can produce concentration even without explicit collusion.
ePBS does not by itself solve this problem. It can make the auction rules more transparent, but transparency does not guarantee a competitive market. The protocol may know which builder won a slot while being unable to prevent that builder from becoming too dominant.
Concentration also creates political and regulatory questions. Builders could become important economic gatekeepers for transactions involving stablecoins, tokenized securities, lending markets or consumer payments. If a small number of firms control a meaningful share of block construction, their decisions could affect applications far beyond crypto trading.
Ethereum developers have considered complementary mechanisms to protect transaction inclusion and reduce censorship. Inclusion-list concepts, for example, seek to ensure that certain transactions identified by validators or other participants cannot be ignored indefinitely by builders. Other proposals aim to preserve a path for transactions to enter blocks even when the highest-paying builder does not include them.
These mechanisms are difficult to design. If inclusion requirements are too weak, they do not constrain builders. If they are too strong, they reduce the value of block auctions or create additional obligations for validators. An inclusion list must also work when a validator has limited information, when a transaction becomes invalid and when network conditions prevent every participant from seeing the same transaction at the same time.
The debate illustrates a larger point. MEV cannot be eliminated simply by changing who assembles a block. It can be redistributed, constrained or made more transparent. Each choice creates winners and losers.
MEV becomes a governance question
Ethereum has often treated MEV as an unavoidable feature of an open transaction market. Traders will search for arbitrage, liquidators will compete for opportunities and users will pay for scarce block space. The question is how much of that activity should be left to market participants and how much should be shaped by the protocol.
ePBS moves Ethereum toward a more explicit answer. By defining the relationship between proposers and builders, it makes MEV management part of the network’s institutional design.
That does not mean Ethereum will choose which trades are ethical or which applications deserve priority. It does mean the protocol will influence how auction participants interact, what commitments are enforceable and what behavior is possible at the block boundary.
Once those decisions are encoded in consensus, future changes may become politically harder. A rule introduced to limit censorship might later be used to impose a different form of transaction policy. A mechanism designed to protect validators might increase the power of infrastructure providers that control access to the builder market. Governance dependencies can grow even when the original goal is decentralization.
The risk is not limited to formal governance. Informal standards matter too. If Ethereum clients, validator services, wallets and decentralized applications converge on a small set of recommended builder or relay configurations, practical control may become concentrated without any change to the protocol itself.
For this reason, the success of Glamsterdam should not be measured only by whether ePBS works in a test environment. It should also be evaluated by the diversity of clients, builders, staking operators and geographic infrastructure that emerge after deployment.
A test of Ethereum’s innovation strategy
Glamsterdam represents a familiar Ethereum challenge. The network is trying to keep pace with the complexity created by its own success.
Block building has become a specialized industry because Ethereum supports valuable and rapidly changing applications. That specialization can improve efficiency, but it can also separate ordinary validators and users from the systems that determine transaction ordering. Enshrined proposer-builder separation is an attempt to make that specialization compatible with a public, permissionless protocol.
The opportunity is substantial. Native rules could reduce reliance on relays, clarify responsibilities, improve payment guarantees and give a wider range of validators access to professional block construction. In a successful design, Ethereum could make MEV infrastructure more accountable without preventing innovation in search, trading and application development.
The danger is equally clear. A complex protocol can harden market structures that were once easier to replace. Builder concentration could become more difficult to challenge. Solo staking could remain formally open but economically marginal. New safeguards could require ongoing governance and introduce policy choices into a layer that many users expect to remain neutral.
The upgrade’s development process will therefore matter as much as its technical specification. Client teams need time to test failure modes. Independent validators need workable implementations, not only theoretical access. Builders need to compete on more than private order flow. Researchers and application developers need to examine how proposed inclusion and censorship protections behave under stress.
Ethereum does not have to choose between a completely unmanaged MEV market and a centrally administered one. But it does need to recognize that protocol design is already shaping the market. Glamsterdam offers a chance to make those choices more transparent and more accountable.
Whether it succeeds will depend on what Ethereum preserves while institutionalizing block production: open participation, credible neutrality and the ability for new builders to challenge established ones. If those properties survive, ePBS could become an important piece of Ethereum’s long-term infrastructure. If they do not, the upgrade may solve the relay problem while creating a more consequential concentration problem inside the protocol itself.