Order Flow Exclusivity and Value Extraction Mechanisms: An Analysis of Ethereum Builder Centralization

TL;DR

This paper analyzes Ethereum builder centralization under PBS, introducing a new exclusivity metric and revealing how market dynamics evolved into four eras, showing centralization as an inherent architectural outcome.

Contribution

It introduces a novel exclusivity metric, employs supervised learning to identify key order flows, and provides a longitudinal market analysis revealing centralization mechanisms.

Findings

75 EOFs and 322 non-atomic MEV flows identified, accounting for 71% and 23% of builder revenue.

Market evolved into four eras, with incumbents decoupling market share from EOF dependency.

Builder centralization emerges as an inherent property of the PBS architecture.

Abstract

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.