Centralization Fears Mount as Over 80% of Ethereum Blocks Were Relayed by Flashbots

Data from mevboost.org shows that over 80% of Ethereum relay blocks were built by Flashbolts, raising further centralization concerns within the community.

While Ethereum’s transition to the proof-of-stake has been smooth sailing with little to no issues, the community is increasingly concerned with the centralization of players involved in block building for the blockchain network.

According to mevboost.org data, six active relays deliver at least one block. These relays are dominated by Flashbots, which has delivered 82.45% blocks. The other active relays are BloXroute Max Profit, BloXroute Ethical, BloXroute Regulated, Blocknative, and Eden.

BitMEX wrote that Flashbots is a centralized entity that could pose a challenge to Ethereum’s PoS migration. According to the firm, the block building infrastructure must be rebuilt to protect against problems. Meanwhile, Flashbots proponents have argued that the system is a DAO and will eventually become decentralized.

Santiment data shows further centralization

Santiment data, as of Sept. 15, showed that two wallets processed 46.15% of Ethereum transactions. Gnosis co-founder Martin Köppelmann said that the two wallets belonged to Lido and Coinbase.

According to our #Ethereum Post Merge Inflation dashboard, 46.15% of the #proofofstake nodes for storing data, processing transactions, and adding new #blockchain blocks can be attributed to just two addresses. This heavy dominance by these addresses is something to watch. pic.twitter.com/KQdFNgGloD

— Santiment (@santimentfeed) September 15, 2022

Köppelmann further revealed that the top seven entities control over two-thirds of block verification, describing the situation as “pretty disappointing.”

Out of the last 1000 blocks, 420 have been built by just Lido and Coinbase.

— Martin Köppelmann (@koeppelmann) September 15, 2022

Before now, the crypto community had extensively debated what the dominance of Ethereum staking by centralized entities meant for the ecosystem’s “decentralization.”

The debate came to a head when US authorities sanctioned Tornado Cash. According to some community members, regulatory pressure could force some validators to censor transactions on the network.

Coinbase founder Brian Armstrong stated that the exchange would close its staking product rather than comply with such requests.

Meanwhile, BeinCrypto reported that Coinbase could blacklist the staked Ethereum of its users if it deems it necessary. According to the report, the US-based exchange Wrapped Staked ETH (cbETH) has a blacklist function in its smart contract.

For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.

The post Centralization Fears Mount as Over 80% of Ethereum Blocks Were Relayed by Flashbots appeared first on BeInCrypto.

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