AI summaryⓘ
The authors study how multiple block builders in decentralized systems choose where to position themselves geographically to capture as many transactions as possible before deadlines. They create a game model to analyze how these location choices affect fairness, transaction coverage, and rewards. Their findings show that while uncoordinated placement can reduce overall efficiency, the smallest earners still make at least half as much as the top earners, and utility isn't too concentrated. Simulations reveal that losses happen mainly when important but distant transactions are accessible, yet builders prefer locations with closer, high-value sources. The authors also highlight differences between planned allocations and selfish decisions and discuss implications for designing better blockchain protocols.
decentralized block buildingNash equilibriumPrice of Anarchytransaction coveragelatencypotential gamereward concentrationblockchain protocolgeographic distributiongame theory
Authors
Burak Öz, Fei Wu, Luis Correia, Sen Yang, Bruno Mazorra, Stefanos Leonardos
Abstract
Decentralized block building mechanisms replace the monopoly of a single proposer with multiple builders. However, their censorship-resistance and fair-access benefits depend not only on the number of builders, but also on whether builders are geographically positioned to provide timely transaction coverage. We study this tension between builder location choice, user transaction coverage, and reward concentration by modeling decentralized block building as a stochastic coverage game. Builders choose regions, information sources emit transactions over a block construction round, and latency determines whether each transaction is received before the deadline. We show that the builder region game is an exact potential game and therefore admits a pure Nash equilibrium. We prove an asymptotically tight factor-2 Price of Anarchy bound, quantifying the price of decentralization from uncoordinated builder placement, and derive tight bounds on builder utility concentration, showing that the lowest-utility builder earns at least half of the highest-utility builder's payoff, and the utility-share HHI is at most 12.5% above the egalitarian benchmark. We complement the theory with simulations, studying the builder region game under richer latency and source environments. We find that welfare losses are most pronounced in intermediate regimes where peripheral sources are reachable and valuable, but selfish incentives still favor regions with strong access to high-value sources. We also find that geographic and utility concentration need not align: planner allocations can improve coverage by assigning builders to lower-payoff peripheral regions, while equilibrium outcomes can be more geographically concentrated but more utility-balanced. We connect our findings to protocol design and discuss future directions on location-market modeling and alternative reward-sharing rules.