Mining Data Reveals Ethereum Heavy Reliance on Flashbots After The Merge.
Following the successful upgrade of Ethereum, The Merge where Ethereum (ETH) switched from proof-of-work (PoW) into a proof-of-stake (PoS) consensus mechanism.
Mining data reveals Ethereum’s ecosystem relies heavily on Flashbots, a single server for building blocks, which raises concerns about a single point of failure.
Ethereum Blocks Built by a Single Flashbots
The Flashbots are a centralized service that delivers Ethereum blocks through transparent and efficient MEV extraction.
Ethereum centralization is heavily influenced by Flashbots, as they account for 82.77% of all relay blocks.
According to mevboost.org, aside from flashbots, there are six active relays currently bringing at least one block in Ethereum namely BloXroute Max Profit, BloXroute Ethical, BloXroute Regulated, Blocknative, Manifold and Eden.
The Need for Complete Redevelopment of Flashbots
A BitMEX blog highlighted the need to redevelop Flashbots or a similar system in an era following the Merge to mitigate unforeseen complications.
The system, however, is described as a decentralized autonomous organization (DAO), meaning it will eventually decentralise on its own.
In addition to Flashbots’ dominance, an analysis from Santiment shows that only two addresses control 46.15 percent of Ethereum’s PoS nodes.
📊 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
“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,” tweeted Santiment.
Meanwhile, crypto research analyst at Bitwise, Ryan Rasmussen added that “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).”