Flashbots build over 82% relay blocks, adding to Ethereum centralization

After The Merge upgrade was completed, Ethereum (ETH), transitioned to a proof-ofstake (PoS), consensus mechanism. This helped the blockchain become more secure and energy efficient. Mining data shows that Ethereum heavily relies on Flashbots, a single server, to build blocks. This raises concerns about a single point-of-failure for the ecosystem.

Flashbots, a centralized entity that is dedicated to transparent and efficient Maximal Extraction Value (MEV), extraction, acts as a relay for the delivery of Ethereum blocks. According to mevboost.org, there are six active relays that deliver at least one block of Ethereum currently, including Flashbots and BloXroute Max Profit, BloXroute Ethical as well as BloXroute Regulated Blocknative and Eden.

Sorted by the number of blocks delivered, relays. Source: mevboost.org

As you can see, 82.77% of relay blocks were built by Flashbots, contributing significantly to Ethereum centralization.

BitMEX also blogged about the need to redevelop Flashbots, or another similar system, in order to avoid any unexpected complications during the Merge. Flashbots supporters argue that the system can be decentralized and autonomous (DAO), and will eventually become decentralized.

Related: Ethereum Merge – Community reacts to memes, GIFs, and tributes

Santiment’s analysis revealed that only two addresses control 46.15% of Ethereum’s PoS nodes. This is in addition to the Flashbots dominance data.

Our #EthereumPost Merge Inflation dashboard shows that 46.15% of #proofofstake nodes used for processing transactions and storing data can be attributed only to two addresses. These addresses are a stronghold and worth keeping an eye on. pic.twitter.com/KQdFNgGloD
— Santiment (@santimentfeed), September 15, 2022

“Since completion of the Merge the majority of blocks, around 40% or more, have been constructed by two addresses belonging both to Lido (Coinbase) and Coinbase. It’s not ideal to have more than 40% of blocks settled by two providers, especially if one is Coinbase, said Ryan Rasmussen (crypto research analyst at Bitwise).


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