Flashbots has built over 82% relay blocks, which adds to Ethereum centralization

After The Merge upgrade was completed, Ethereum became a Proof-of-Stake (PoS consensus mechanism), which 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 blockchain.

Flashbots, a centralized entity that is dedicated to transparent and efficient Maximal Extraction Value (MEV), extraction, acts as a relay to deliver Ethereum blocks. Data from mevboost.org indicates there are six active relays currently delivering at most one block in Ethereum. These include Flashbots and BloXroute Max Profit. BloXroute Ethical. BloXroute Regulated. Blocknative.

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 highlighted the need to redevelop Flashbots or another similar system in order to avoid any unexpected complications after the Merge. Flashbots supporters argue that the system can be a decentralized autonomous organisation (DAO), and will eventually become decentralized.

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An analysis by Santiment revealed that only two addresses control 46.15% of Ethereum’s PoS nodes.

“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).

Opinion writer on 7trade7