Lido has proposed a rebuild of its maximum extractable value (MEV) policy — the surplus captured by deciding which transactions enter a block and in what order — for its staking operations on the staking infrastructure it runs across Ethereum (ETH). The proposal, published on November 4, 2026, is timed to Ethereum's move toward proposer-builder separation (ePBS) and includes a builder deposit of 1 ETH. For stETH holders the connection is direct: MEV captured at the block-production layer is part of what flows back to stakers, making the policy that governs those flows directly relevant to how staking rewards are composed.

MEV in Ethereum's Block-Building Pipeline

MEV has been a persistent feature of Ethereum's block production. The term originated as "miner extractable value" during the network's proof-of-work era and was reframed as "maximal extractable value" after the Merge, Ethereum's transition to proof-of-stake completed in September 2022. Because whoever assembles a block can determine its contents and transaction ordering, the ability to capture MEV sits with specialized block builders and, by extension, with the validators and staking services that propose blocks to the network. That layered structure is why a staking protocol's MEV policy, rather than protocol code alone, ends up shaping what its users ultimately receive.

Proposer-Builder Separation and ePBS

Proposer-builder separation (PBS) divides the work of constructing blocks from the task of proposing them. Since the Merge, this split has operated outside the core protocol through MEV-boost, an optional sidecar that allows Ethereum validators to receive completed blocks from competing professional builders via intermediaries known as relays. ePBS — enshrined proposer-builder separation — is the long-discussed protocol-native version of this arrangement, which would embed the division of labor directly into Ethereum itself. Lido framed its MEV policy rebuild in the context of this development, and the overlap is the practical reason the timing is notable: node operator workflows and stakers' reward flows are tied to how blocks are built and proposed.

Background on Lido

Lido is the largest liquid staking protocol on Ethereum. Users deposit ETH and receive stETH, a liquid staking token representing their staked position, while a set of node operators runs the underlying validators. Because MEV earned by validators is passed on to stakers, the protocol's MEV policy governs how block-building rewards flow to its users. Given Lido's position as the largest liquid staking service, the terms set out in the proposal — including the 1 ETH builder deposit — describe the conditions under which a substantial share of Ethereum's staked ETH interacts with builders and relays. As a proposal, its provisions would take effect only if adopted through Lido's governance process, and its progression alongside Ethereum's ePBS work is the element to follow from here.

This content was first published on COINOTAG.