Physical Address
304 North Cardinal St.
Dorchester Center, MA 02124
What Is Builder Payment in Crypto?
Builder payments are how Ethereum validators get paid by block builders capturing MEV. Who pays whom, how money moves, and what solo stakers really earn.
A builder payment is the ETH a block builder pays to an Ethereum validator in exchange for having its block chosen in the next slot — funded by the MEV and transaction fees the builder captures from ordering transactions.
Few mechanics in post-Merge Ethereum are less visible but more financially significant. On one side, a specialist called a block builder races to assemble the most profitable block possible. On the other side, the validator choosing which block to add to the chain simply picks the one that pays the most. What flows between them is the builder payment — and on a high-activity day, it can dwarf regular staking rewards.
This piece maps the full flow: the cast of characters, the sequence of steps inside a single 12-second slot, how builder payments differ from the gas fees users pay, and why the mechanism matters as much for a solo staker running a home node as it does for Lido.
Key takeaways
- A builder payment is ETH paid by a block builder to an Ethereum validator (proposer) in exchange for using the builder’s block in the next slot.
- Builder payments come from MEV and transaction fees the builder captures — they are a block-level payment, entirely separate from the per-transaction gas fees users pay.
- Any validator running MEV-Boost can receive builder payments, including solo home stakers with a single validator node.
—
What Is a Builder Payment in Crypto?
When an Ethereum validator is about to propose a new block, it faces a choice: build the block itself, or accept a pre-assembled block from a specialist builder who promises to pay for the privilege. The payment the builder makes is the builder payment.
Builders earn their position by aggregating transactions from the public mempool and from private bundles submitted by MEV searchers. They simulate thousands of orderings, identify the sequence that extracts the most value — through arbitrage, sandwich trades, or liquidations — and then bid for the right to have their optimized block added to the chain. The validator picks the highest bidder. The builder payment lands in the validator’s designated address the moment the block is added.
Builder payments are denominated in ETH and are fundamentally distinct from the gas fees or priority tips a user includes when sending a transaction. Gas fees are per-transaction costs that flow to validators as part of normal block economics. A builder payment is a block-level transfer, negotiated in an automated auction, that compensates the validator for choosing the builder’s block over all other options.
Builder payments vary enormously depending on mempool conditions. On a quiet day, most are modest. On a high-volatility day — when large liquidations or major token launches flood the mempool — the winning builder may have extracted enough MEV to offer the validator several ETH for a single block. That variance is one of the defining features of the builder payment system, and the main reason validator operators pay close attention to their relay setup and MEV-Boost configuration.
The Roles Behind a Builder Payment
Four actors make the builder payment possible. Understanding each one makes the payment flow obvious rather than mysterious.
Searchers scan the public mempool continuously, looking for profitable transaction patterns — price gaps across DEXs, large pending trades they can sandwich, or liquidatable positions on lending protocols. When they find one, they package the relevant transactions into a bundle and submit it to one or more builders. Searchers pay builders a tip for including their bundle. Builders pay validators for including the block. You can inspect pending bundles using a bundle checker to see what types of transactions move through this pipeline.
Builders are sophisticated entities — often running proprietary software and colocated servers — that aggregate bundles from multiple searchers and mix in additional public mempool transactions. Their job is to find the block ordering that maximizes total extractable value. Once they have a candidate block, they attach a bid (the proposed builder payment) and submit both to a relay.
Relays act as neutral escrow intermediaries between builders and validators. A relay holds the full block contents, verifies the builder’s bid is backed by real funds, and publishes only the block header — not the contents — to validators. That separation prevents front-running: validators can see the bid amount without seeing which transactions are inside, so they cannot exploit the block contents before committing to propose it.
The table below summarizes each role:
| Role | Job in the Builder Payment Flow |
|---|---|
| Searcher | Identifies MEV opportunities and submits transaction bundles to builders |
| Builder | Assembles the highest-value block and submits the block plus bid to relays |
| Relay | Holds block in escrow, publishes bid headers to validators, and releases block after validator commits |
| Validator (Proposer) | Selects the highest-bid block header, signs it, and receives the builder payment |
Flashbots, the research and development organization behind MEV-Boost, established this role separation after the Merge. Before it existed, validators either built blocks themselves (missing most MEV) or relied on private relationships with miners. The open auction changed that.
How a Builder Payment Actually Works
Every 12 seconds on Ethereum, a slot opens and a single validator is scheduled to propose a block. What happens during those 12 seconds — particularly in the first few — determines whether the validator earns a few hundred dollars or several ETH.
Here is the sequence, step by step.
Builders start preparing as soon as the previous block lands. They pull in fresh searcher bundles and mempool transactions, run simulations to find the highest-value ordering, and assemble candidate blocks. Each builder submits its block payload to one or more relays, along with the bid: the ETH amount it commits to paying the proposer if its block is chosen.
MEV-Boost, software running on the validator’s node, queries all connected relays and receives the highest-bid block header from each one. The headers contain the bid amounts but not the block contents. MEV-Boost surfaces the top bid to the validator client.
The validator signs the winning header. That cryptographic signature is a binding commitment — the validator has agreed to propose exactly that block. At this point, neither the builder nor the validator can back out without penalty.
The relay, confirming the signed header, releases the full block payload to the validator. The block contains a final transaction that transfers the builder’s payment to the validator’s feeRecipient address. This is the moment the payment executes.
The validator broadcasts the complete block to the network. The block is attested to by other validators and added to the chain. The builder payment settles.
The escrow design is what makes the whole system trustworthy. The relay holds the block body until the header is signed, so neither party can cheat — the builder cannot withhold the payment after the block is included, and the validator cannot see the transactions and build on them without committing to the builder’s block. Flashbots documented this architecture when MEV-Boost launched in 2022, and it remains the structural backbone of builder payments today.
Worth noting for 2025: ePBS (Enshrined Proposer-Builder Separation) moved this auction logic into Ethereum’s core protocol. Before ePBS, MEV-Boost was optional third-party software — a validator could run without it and simply build blocks locally. After ePBS, the builder payment auction is a native protocol function. The relay trust assumptions are reduced, and the system is more censorship-resistant because no single relay operator controls access to the builder market.
Builder Payment vs Priority Fee — What Is the Difference?
The confusion between builder payments and priority fees is common and understandable. Both involve ETH flowing to validators. But they operate at different levels of the transaction stack, for different reasons, paid by entirely different parties.
A priority fee (sometimes called a “tip”) is set by the user submitting a transaction. It is an incentive for the block builder to include that transaction rather than deprioritizing it. Priority fees go to the validator as part of normal execution-layer rewards — they flow in because of a single transaction, not because of who built the block.
A builder payment, by contrast, is paid by the builder entity for the right to have its entire block adopted. The builder may have collected tens of thousands of transactions in one block, extracted several ETH of MEV from the optimal ordering, and then offered the validator a competitive fraction of that total take. One builder payment covers the whole block. It has nothing to do with any individual user’s tip.
Two tables below draw the line between them. The first covers the builder payment side. The second covers the priority fee side.
| Builder Payment | Detail |
|---|---|
| Who pays | Block builder |
| When | Once per block, on inclusion |
| Level | Block-level |
| Goes to | Validator’s feeRecipient address |
| Amount type | Competitive auction bid — can be multiple ETH |
| Priority Fee | Detail |
|---|---|
| Who pays | Transaction sender (user) |
| When | Per transaction, as part of execution |
| Level | Transaction-level |
| Goes to | Validator (execution layer reward) |
| Amount type | Small per-transaction tip — usually fractions of gwei |
The two flows are independent. A validator optimizing its feeRecipient configuration and relay set is optimizing for builder payments. A user trying to get their swap confirmed faster is optimizing their priority fee. Another Ethereum fee type that sometimes gets bundled into this confusion is the blob fee — a separate cost layer introduced for data availability with its own dynamics. See blob fees explained for the full breakdown.
What Builder Payments Mean for Solo Stakers
Before MEV-Boost, solo stakers were at a structural disadvantage. Large staking entities — Lido, Rocket Pool node operators, institutional validators — had the resources to run proprietary MEV extraction software or strike private deals with transaction sources. A home staker with one validator and a Raspberry Pi had no real access to MEV revenue.
MEV-Boost changed the equation. By connecting any validator to an open builder marketplace, it made the builder payment auction accessible to everyone. A solo staker running MEV-Boost on their home node competes for the same block bids as Lido’s full validator fleet. The relay queries every connected validator impartially and publishes bids to all of them. The solo staker wins by signing the highest-bid header, exactly the same way any other validator does.
The numbers are meaningful. Validators running MEV-Boost have earned around 3.29% APY versus roughly 2.93% without it, per Flashbots MEV-Boost data — though yields shift with market conditions and competition. The gap seems small in percentage terms, but it compounds meaningfully across a staking epoch and widens significantly on high-MEV days.
There is one important caveat. Execution layer rewards, which include builder payments, are distributed unevenly. Most blocks produce modest builder payments. But roughly 12% of a solo staker’s rewards come from block proposals, and occasionally a single proposal can deliver 20 or more ETH if the builder captured an unusually large MEV opportunity. Solo stakers get infrequent, potentially large windfalls rather than a predictable premium.
MEV-Boost is also optional, which means it carries relay trust assumptions. If your connected relays go offline or are found to be censoring transactions, your validator falls back to building blocks locally — losing builder payment revenue until you switch relays or the situation resolves. Liquid staking pools like Lido absorb this variability across thousands of validators, smoothing out the high-MEV-block lottery entirely — useful context if you are weighing solo staking against pooled options.
One development worth watching: BuilderNet, launched by Flashbots in early 2025, is a decentralization effort aimed at reducing builder concentration. Today, a small number of large builders win the majority of blocks. BuilderNet is designed to make the builder market less concentrated, which could affect how builder payments distribute across the validator set over time.
Builder Payments on Solana — How Jito Tips Compare
Ethereum is not the only chain where validators get paid extra for favorable transaction ordering. On Solana, the equivalent mechanism is the Jito tip, and users who move between chains often ask whether the two concepts are the same thing.
They are similar in intent but different in structure. The most important structural difference is who makes the final payment to the validator. On Ethereum, the block builder — the entity that aggregated many searcher bundles — is the one that pays the proposer. Searchers pay builders for bundle inclusion. Builders then pay validators for block inclusion. The payment chain has an extra link.
On Solana with Jito, the searcher’s bundle includes a tip payment that flows directly to a Jito tip account, which distributes rewards to validators. The intermediary layer is shorter. There is no separate “builder” entity between the searcher and the validator in the same way Ethereum’s architecture defines one.
As of mid-2026, over 95% of Solana’s active stake runs the Jito client, making Jito tips a near-universal feature of Solana block production. Solana also introduced BAM (Block Assembly Mechanism) in September 2025, which moves Solana closer to Ethereum-style PBS with a more explicit separation between block assembly and block proposal.
Two tables below map the key differences — one for Ethereum, one for Solana.
| Ethereum Builder Payment | Detail |
|---|---|
| Who pays the validator | Block builder, via relay |
| Intermediary | Relay (escrow model) |
| Mechanism | MEV-Boost auction, now ePBS native |
| Protocol status | Native since ePBS, 2025 |
| Solana Jito Tip | Detail |
|---|---|
| Who pays the validator | Searcher bundle, via Jito tip account |
| Intermediary | Jito tip account (distribution model) |
| Mechanism | Jito client with on-chain tip distribution |
| Protocol status | Jito client dominant — BAM introduced 2025 |
Both chains are converging on the same economic outcome — validators receive extra compensation for MEV that benefits from transaction ordering — while the structural route to that payment still differs. Ethereum’s ePBS bakes the auction into the protocol itself. Solana’s BAM takes a similar step but through a different architectural path, reflecting the two chains’ different consensus and execution models.
FAQ
What is a builder payment in crypto?
A builder payment is the ETH a block builder pays to an Ethereum validator for the right to have its block added to the chain. Builders capture MEV from the transactions they order and pass a competitive share of that value to the validator — who picks whichever builder’s payment is highest.
How is a builder payment different from a gas fee?
A gas fee is what a user pays to get their individual transaction processed. A builder payment is what a builder pays for the entire block — it is a separate, much larger transfer that happens at the block level after all transactions have been ordered. The two flows are independent. Users control their gas fees. Builders control their block-level bid.
Who receives the builder payment?
The validator (block proposer) receives the builder payment, deposited directly to their feeRecipient address when the block is included. Relays do not take a cut of the builder payment itself — they operate on trust or separate commercial arrangements outside the payment flow.
Do solo stakers get builder payments?
Yes. Any validator running MEV-Boost can receive builder payments, including solo home stakers with a single validator node. MEV-Boost connects them to the same open builder marketplace used by large staking pools. The auction is impartial — the highest bid wins regardless of how many validators the operator runs.
What changed with ePBS and builder payments in 2025?
ePBS (Enshrined Proposer-Builder Separation) moved the builder auction into Ethereum’s core protocol. Before ePBS, MEV-Boost was optional third-party software that validators chose to run. After ePBS, the builder payment auction is a native protocol function. Relay trust assumptions are reduced, censorship resistance improves, and the payment mechanism no longer depends on any single external software provider. For a wider view of how post-Merge block space works, blobspace covers the related Layer-1 capacity changes that arrived alongside ePBS.
Where To Start with Builder Payments
If you are a validator operator or aspiring solo staker, here are four concrete next steps that follow from understanding builder payments.
Connect MEV-Boost and compare relay options. Running MEV-Boost is the single highest-impact action for capturing builder payments. Research relay operators — Flashbots relay, bloXroute, Ultrasound relay — on their censorship policies, uptime history, and fee structures before connecting. You can usually run multiple relays simultaneously, and MEV-Boost will always take the highest bid.
Set your feeRecipient address correctly. Builder payments go to whatever Ethereum address you set as your feeRecipient. Make sure it points to a wallet you control, not to a default or placeholder address. Verify this in your validator client configuration before your next proposal.
Understand bundle mechanics. The transaction bundles that searchers submit are what give builders something to optimize in the first place. Knowing how bundles work helps you evaluate builder quality and understand why certain blocks produce much higher bids than others.
Monitor your builder payment history. Most validator dashboards and block explorers show execution layer rewards per proposal, broken down to include the builder payment component. Track this over several months to understand the variance — the infrequent high-MEV blocks that skew your returns upward.
If you are not yet staking solo, consider what the builder payment model means for pool selection. Liquid staking protocols handle relay selection and MEV-Boost configuration on your behalf, but they also pool MEV rewards across all depositors, smoothing out the high-MEV lottery. Neither approach is better for everyone — the right choice depends on whether you want to run your own validator or trade that control for simplicity.
