The need for a thorough redesign of Flashbots or a comparable mechanism is necessary as Flashbots grow over 82% relay blocks, increasing Ethereum centralization.
Ethereum (ETH) switched to a proof-of-stake (PoS) consensus method after The Merge update was completed, which helped the blockchain become more secure and energy-efficient. However, mining data shows that Ethereum heavily relies on Flashbots, a single server, for its construction blocks, raising concerns about an ecosystem with a single point of failure.
In order to transport Ethereum blocks, Flashbots, a centralized organization committed to efficient and transparent Maximal Extractable Value (MEV) extraction, serves as a relay. According to data from mevboost.org, six active relays—Flashbots, BloXroute Max Profit, BloXroute Ethical, BloXroute Regulated, Blocknative, and Eden—are now delivering at least one block in Ethereum.
Flashbots alone have been found to build 82.77% of all relay blocks, as is evident above. This finding significantly increases Ethereum’s centralization.
Flashbots or a comparable technology must be completely redeveloped, according to a linked BitMEX blog, in order to prevent unanticipated problems in the period following the Merge. The system is a decentralized autonomous organization (DAO), according to supporters of Flashbots, and will eventually lose its central control.
Complementing the data related to Flashbots’ dominance, an analysis from Santiment indicated that 46.15% of Ethereum’s PoS nodes are controlled by only two addresses.
Since the successful completion of the Merge, the majority of the blocks — somewhere around 40% or more — have been built by two addresses belonging to Lido and Coinbase. It isn’t ideal to see more than 40% of blocks being settled by two providers, particularly one that is a centralized service provider (Coinbase).
Centralization is popular discourse in the blockchain industry and supporters of proof-of-stake argue that Proof-of-Stake makes attacks more expensive and futile because attackers risk having their staked ETH decreased in retaliation for trying to disrupt the network.
Critics contend that the previous power actors will simply be replaced by new ones, despite the fact that control of the Ethereum network will no longer be primarily held by a small number of publicly traded mining syndicates.