Understanding FOCIL: Ethereum’s Solution to Block Building Centralization

Protecting Ethereum’s Core Promise of Decentralization

Ethereum has long stood as a beacon of decentralized blockchain technology, but beneath its surface, significant challenges threaten this foundational promise. Thomas Thiery, a researcher at the Ethereum Foundation’s Robust Incentives Group, is working on a critical solution called FOCIL (Fork-Choice Enforced Inclusion Lists), formerly known as Fossil. This innovative mechanism addresses one of Ethereum’s most pressing concerns: ensuring that transactions can’t be censored by powerful actors who have come to dominate the block-building process. At its heart, FOCIL dramatically improves inclusion guarantees for public transactions by allowing multiple validators—not just a single powerful entity—to enforce which transactions make it into Ethereum blocks. What makes this approach particularly thoughtful is its intentional design to prevent Maximal Extractable Value (MEV) from undermining censorship resistance. In simpler terms, FOCIL ensures that the pursuit of profit doesn’t compromise Ethereum’s commitment to being an open, accessible network where any valid transaction can be processed. This mechanism represents a crucial evolution in Ethereum’s infrastructure, one that could determine whether the network maintains its decentralized character or gradually slides toward control by a concentrated few.

The Centralization Crisis: How MEV Changed Everything

To understand why FOCIL matters, we need to grasp how dramatically MEV has reshaped Ethereum’s landscape. MEV—which stands for Maximal Extractable Value—introduced what Thiery describes as “a big centralization force” among validators. Initially, Ethereum’s validators were quite decentralized, with many independent actors participating in block validation. However, MEV changed the game entirely. In essence, MEV refers to the context in which a transaction is placed within an Ethereum block—the ordering of transactions and the opportunity to insert new ones strategically. This might sound technical, but it has enormous economic implications. The extractable value from MEV actually dwarfs the value of the transactions themselves, previously estimated at around 1% of total transaction volume, which translates to hundreds of millions of dollars annually. This created powerful incentives for sophisticated actors to specialize in extracting this value, leading to a situation where block building became dominated by just a handful of builders. These dominant builders possess the technical expertise and infrastructure to construct blocks in milliseconds, optimizing transaction ordering to capture maximum value. What was once a decentralized network of validators has effectively become dependent on a small oligopoly of block builders, fundamentally undermining Ethereum’s decentralization and creating real censorship risks.

Inside the Block Building Pipeline: Searchers, Builders, and the MEV Ecosystem

The current Ethereum block construction process operates through a sophisticated pipeline that few outside the ecosystem truly understand. It begins with “searchers”—specialized actors who identify profitable transaction ordering opportunities by analyzing the pending transaction pool (mempool). These searchers create valuable transaction bundles designed to extract MEV, such as sandwich attacks around large trades or arbitrage opportunities between decentralized exchanges. These bundles are then passed to “builders,” who are technically sophisticated operators capable of compiling these bundles along with regular user transactions into complete blocks at incredible speed. Some builders are also searchers themselves, giving them a competitive advantage. The builders then participate in an auction where they compete to have their constructed block selected by the validator (called the “proposer”) who has the right to propose the next block to the network. This auction process is currently mediated by entities called “relays,” which serve as trusted intermediaries ensuring fair exchanges between proposers and builders. The relay prevents proposers from simply stealing the builders’ work without payment while also preventing builders from sending invalid blocks. However, this reliance on trusted relays represents a centralization point in the system—exactly the kind of vulnerability Ethereum seeks to eliminate through upcoming protocol changes.

The Power Dynamics: Why Proposers Hold the Keys to the Kingdom

Within this complex ecosystem, proposers occupy a uniquely powerful position that shapes the entire value flow. When a validator is selected to propose a block, they essentially hold an auction where builders submit bids for the right to have their constructed block included in the chain. The winning builder pays the proposer, and remarkably, most of the MEV value is actually captured by the proposer rather than the builder. This happens because competitive auction dynamics force builders to bid up to nearly their entire expected profit to win the slot, with that value flowing to the proposer. The proposer then redistributes much of this value back to the network’s stakers through the normal reward mechanism. While this might seem like an efficient market outcome, it creates concerning dynamics. Proposers have strong incentives to maximize their auction revenue, which can conflict with principles like censorship resistance. If a powerful entity (like a government or corporation) were willing to pay proposers to exclude certain transactions, the current system creates clear financial incentives to comply. Furthermore, the concentration of building power means proposers have limited choices—if all major builders implement certain censorship policies, proposers have little alternative but to accept blocks that exclude targeted transactions. This power concentration is precisely what FOCIL aims to address by giving validators collective power to force transaction inclusion regardless of what individual builders prefer.

Ethereum’s Evolving Infrastructure: From Trusted Relays to Trustless Commitments

Recognizing these centralization risks, the Ethereum Foundation is implementing significant infrastructure changes designed to reduce trust assumptions and enhance censorship resistance. The current relay system, while functional, requires participants to trust these intermediary entities—a compromise that sits uncomfortably with Ethereum’s trustless philosophy. In an upcoming hard fork (likely the Pectra upgrade), Ethereum will implement a “commit and reveal” scheme that eliminates the need for trusted relays. Under this new system, builders commit to a block by submitting a cryptographic commitment (essentially a hash of their proposed block) without revealing the full contents. Once the proposer selects a commitment and publishes it, the builder then reveals the full block. This mechanism ensures the proposer cannot steal the builder’s work (since they only see a commitment initially) while also ensuring builders cannot change their block after being selected (since the commitment locks them in). This shift represents meaningful progress toward trustless block building, but it doesn’t solve the underlying centralization of builders or the censorship risks that come with it. That’s where FOCIL enters the picture as a complementary mechanism that works alongside these infrastructure improvements to give decentralized validators collective power to enforce transaction inclusion.

FOCIL: Empowering Validators to Enforce Inclusion and Preserve Decentralization

FOCIL represents a thoughtful solution to the centralization challenges facing Ethereum’s block production. The mechanism allows multiple validators—not just the single proposer—to create and enforce inclusion lists of transactions that must appear in upcoming blocks. This means that even if dominant builders want to censor certain transactions (whether for profit, regulatory pressure, or other reasons), decentralized validators can collectively force those transactions to be included anyway. What makes FOCIL particularly elegant is its intentional design to avoid involving MEV. Rather than allowing validators to order transactions or create new MEV opportunities through inclusion lists, FOCIL simply ensures transactions get included without specifying their position in the block. This preserves censorship resistance without creating new centralization vectors through MEV extraction on the inclusion mechanism itself. The design reflects a deep understanding that any mechanism touching transaction ordering will inevitably attract MEV optimization, which would recreate the very centralization problems FOCIL aims to solve. By focusing narrowly on inclusion guarantees rather than ordering, FOCIL provides a credible censorship resistance guarantee while maintaining Ethereum’s decentralized validator set as the ultimate backstop against transaction censorship. As Ethereum continues evolving, mechanisms like FOCIL represent the ongoing work required to preserve the network’s foundational values in the face of powerful economic forces that constantly push toward centralization. For users, developers, and stakeholders in the Ethereum ecosystem, understanding these dynamics isn’t just academic—it’s essential to grasping whether Ethereum can maintain its promise as a neutral, censorship-resistant platform for decentralized applications and financial systems.