Understanding the Ethereum Validator Process

To grasp how transactions are processed and validated on the Ethereum network, let's break down the value chain of the Ethereum validator network.

1. Transaction Submission and Mempool:

   • When users interact with decentralized applications (Dapps) or send Ethereum assets, their transactions first enter a holding area known as the Mempool. This is where transactions wait before being included in a block.

2. Role of Block Builders:

   • Block Builders are responsible for assembling transactions into blocks. They retrieve transactions through three main channels:

     • Observing the Mempool: Block builders monitor the Mempool directly to gather transactions.

     • Working with MEV Searchers: These users look for arbitrage opportunities in the Mempool. They submit their own transactions to capitalize on these opportunities and provide their transaction sets to block builders.

     • Direct Submissions: Users can also send their transactions directly to block builders.

3. Transaction Routing via Relays:

   • Relays connect block builders with the validator network. They use the mev-boost public auction service to allow validators to choose the most profitable transactions based on bids, known as MEV (Maximal Extractable Value) fees.

4. Transaction Handling by Validators:

   • Validators receive transactions in two ways:

     • Directly from the Mempool: Through their Execution Clients, validators pick up transactions and build blocks locally.

     • From Relays: Transactions can also be pre-built into blocks by block builders and sent to validators via Relays.

5. Block Proposing and Validation:

   • Every epoch (approximately 6.4 minutes), 32 validators are randomly selected to propose blocks. Each validator has a roughly 12-second window to propose a block.

   • The proposing validator has around 4 seconds to receive, execute, and broadcast the block.

   • A random committee of validators, known as the Beacon Committee, then has about 8 seconds to review and confirm the block's validity.

6. Finalization:

   • Once a block is proposed and validated, it is added to the blockchain. At the end of every 2 epochs, all transactions included in the finalized blocks are permanently recorded and cannot be reversed without significant penalties, including the potential burning of staked ETH across the network.