Increased Centralization on Ethereum:
Concerns about the centralization of the Ethereum network have grown following Blocknative’s decision to halt its MEV-boost relay. Relayers, which are crucial for settling Ethereum transactions, bridge the gap between users and the blockchain by batching and broadcasting transactions. With Blocknative’s exit, the number of active relayers on the network has dwindled to just four.
The Role of MEV-Boost Software:
After Ethereum’s shift to proof-of-stake, block proposing and block building became separate processes. MEV-boost software was introduced to ensure an efficient market between these proposers and builders. Post the Merge, a select group of Ethereum block builders, which once included Blocknative, started operating their own relays. As of now, a staggering 93% of Ethereum blocks created in the past two weeks utilized MEV-boost. This data is supported by mevboost.pics. Furthermore, five entities were responsible for relaying 98% of the MEV-boosted transactions, as per relayscan.io.
Why Blocknative Exited:
Blocknative decided to discontinue its MEV-boost relay as it was no longer economically feasible. The remaining four relayers do not charge any fees for their services, rendering this essential Ethereum infrastructure unprofitable. A recent proposal by Flashbots aims to establish a “PBS Guild” to gather donations from the Ethereum community, partly to reward relayers. Uri Klarman, CEO of Bloxroute, suggests that a fee mechanism for relayers should be implemented. He believes that block validators are expecting this change.
Klarman mentioned the need for consensus among the remaining relayers and ideally the Ethereum community. If the economic incentive issue isn’t addressed, he fears the perceived centralization of MEV-boost relays might escalate.
Elias Simos, CEO of Ethereum data platform Rated, expressed mixed feelings about Ethereum’s continued reliance on its four major relayers. He acknowledged their long-standing presence in the space, implying they have much at stake if Ethereum faces challenges. However, he questions if this is sufficient to ensure the network’s decentralization.
The recent developments surrounding Ethereum’s relayers and the MEV-boost relay system have brought to light pressing concerns about the network’s decentralization. As key players like Blocknative exit the scene, the Ethereum community faces a crossroads. While the current relayers have shown commitment and longevity, the network’s increasing centralization poses potential risks to its foundational principles. It’s imperative for the community, developers, and stakeholders to collaboratively address these challenges, ensuring Ethereum’s robustness and adherence to its decentralized ethos. As the blockchain landscape continues to evolve, maintaining the balance between efficiency and decentralization will be paramount for Ethereum’s sustained growth and success. Here at allincrypto.com we will keep you up to date!