Understanding the Difference Between Relay and PBS in MEV

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Introduction

Relay: A relay in the context of MEV (Maximal Extractable Value) is an intermediary that takes blocks from Block Builders and ensures their legitimacy before passing them to Validators. Relays are trusted entities that both proposers and builders need to trust.
Proposer-Builder Separation (PBS): PBS is a concept in Ethereum that aims to improve Scalability and security by dividing the responsibilities of Block Building into two separate roles: Block Proposers and block builders. This separation allows for Specialization and can help mitigate the Adverse Effects of MEV.
Trust Levels: The trust required for relays is higher compared to PBS. In the relay system, both proposers and builders need to trust the relay, whereas PBS reduces the need for such trust by separating the roles.
MEV-Boost: MEV-Boost introduces a Relay Aggregator that serves the validator the winning bid from all relays. Validators can connect to multiple relays that aggregate all the builders, enhancing the efficiency of the process.
Impact on MEV: PBS aims to address the MEV problem by allowing actors to specialize in either proposing or building blocks, thereby simplifying the process and potentially reducing the opportunities for MEV extraction.

Definition: A relay is an intermediary that takes blocks from block builders and ensures their legitimacy before passing them to validators.
Function: Relays act as trusted entities that both proposers and builders need to trust.
MEV-Boost: MEV-Boost introduces a relay aggregator that serves the validator the winning bid from all relays.
Connection: Validators can connect to multiple relays that aggregate all the builders, enhancing the efficiency of the process.
Trust: The trust required for relays is higher compared to PBS.

Definition: PBS is a concept in Ethereum that aims to improve scalability and security by dividing the responsibilities of block building into two separate roles: block proposers and block builders.
Specialization: This separation allows for specialization and can help mitigate the adverse effects of MEV.
Simplification: By separating these roles, the process of block building is simplified.
Security: PBS can enhance the security of the network by reducing the opportunities for MEV extraction.
Implementation: PBS is being explored as a solution to the MEV problem in Ethereum.

Relay Trust: The trust required for relays is higher compared to PBS.
Proposer and Builder Trust: In the relay system, both proposers and builders need to trust the relay.
PBS Trust: PBS reduces the need for such trust by separating the roles of proposers and builders.
Security Implications: Higher trust in relays can lead to Centralization Risks, whereas PBS aims to distribute trust more evenly.
Efficiency: The trust dynamics in PBS can lead to more efficient block building and validation processes.

Definition: MEV-Boost introduces a relay aggregator that serves the validator the winning bid from all relays.
Function: Validators can connect to multiple relays that aggregate all the builders.
Efficiency: MEV-Boost enhances the efficiency of the block building and validation process.
Trust: MEV-Boost relies on the trust in relays to ensure the legitimacy of blocks.
Impact: MEV-Boost aims to streamline the process of MEV extraction and reduce its adverse effects.

Mitigation: PBS aims to address the MEV problem by allowing actors to specialize in either proposing or building blocks.
Simplification: The separation of roles simplifies the process and reduces the opportunities for MEV extraction.
Security: PBS can enhance the security of the network by distributing trust more evenly.
Efficiency: The trust dynamics in PBS can lead to more efficient block building and validation processes.
Future: PBS is being explored as a long-term solution to the MEV problem in Ethereum.