Order Flow Exclusivity and Value Extraction Mechanisms: An Analysis of Ethereum Builder Centralization
For Ethereum researchers and stakeholders, this work provides a comprehensive empirical analysis of order flow dynamics and demonstrates that builder centralization is structurally inherent to PBS, challenging the assumption that it is solely driven by influential order flows.
This study analyzes Ethereum builder centralization under PBS, finding that exclusive order flows (EOFs) and non-atomic MEV account for 71% and 23% of builder revenue, respectively, and that centralization is an emergent property of the PBS architecture itself.
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.