Ethereum

Rule

Rocket

Beacon

<ul class="list-ic vertical"> 
 <li> 1 <a>Blocknative’s departure resulted in reducing the number of active relayers on the Ethereum network&nbsp;</a> </li> 
 <li> 2 <a>Ethereum network is under scrutiny for its increased centralization within the blockchain system.</a> </li> 
</ul> 
Worries regarding heightened centralization within the Ethereum network have escalated with Blocknative’s recent announcement of discontinuing its MEV-boost relay on Tuesday. 
The Ethereum network, once hailed for its decentralization, is now under scrutiny due to rising concerns of increased centralization within the blockchain system. This shift is unexpected considering Ethereum’s role as a pioneer in decentralized finance services. 
Relayers are essential in the Ethereum ecosystem, facilitating the prompt and efficient execution of transactions. They serve as intermediaries that connect users with the blockchain, optimizing transaction processing by bundling and transmitting transactions. 
Following Blocknative’s departure, the number of active relayers on the Ethereum network has significantly dwindled, leaving just four remaining at the time of this report. This consolidation raises concerns about centralization within the ecosystem. 
Today, nearly all Ethereum transactions use MEV-boost relays. 93% of Ethereum blocks created in the past 14 days made use of MEV-boost, according to data compiled on mevboost.pics. At the time this data was compiled, five entities were responsible for relaying 98% of the MEV-boosted transactions, per relayscan.io. 
After Ethereum transitioned to a proof-of-stake consensus mechanism, the responsibilities of block proposing and block building became separate tasks. To streamline this process, MEV-boost software was introduced to create an efficient market between these proposers and builders. However, after the merge, a group of well-funded Ethereum block builders, including Blocknative at the time, started operating their relays. 
Blocknative decided to discontinue its MEV-boost relay due to economic challenges. The remaining four relayers are currently not charging any fees for their services, which has rendered essential Ethereum infrastructure unprofitable for its operators. 
A recent proposal by Flashbots suggests the creation of a “PBS Guild” that would seek donations from the Ethereum community to compensate relayers. Uri Klarman, CEO of the relaying entity Bloxroute, argues that a fee mechanism for relayers should be implemented, and he advises block validators to consider this development. 
<h2 class="wp-block-heading" id="strong-self-limit-rule-demanded-to-counter-centralization-strong">Self-Limit Rule Demanded to Counter Centralization</h2> 
Earlier, the Ethereum community <a href="https://www.thecoinrepublic.com/2023/09/01/ethereum-stakers-agree-to-22-self-limit-seeking-decentralization/" target="_blank" rel="noreferrer noopener">reportedly</a> took steps towards countering the growing centralization through liquidity protocols. Decentralization is a recurring concern in blockchain networks. With the rise of decentralized finance (DeFi) and crypto staking, maintaining decentralization is crucial. To address this, a proposal to limit staking to 22% of the network aims to prevent excessive influence by any single speaker. Ethereum staking pools are now showing interest in this initiative. 
The Ethereum Beacon chain community health consultant, Superphiz, highlighted that several significant Ethereum (ETH) staking pools, including Rocket Pool, StakeWise, Stader Labs, and Diva Staking, are either already committed or in the process of committing to limit validators’ self-staking to 22%. This move aims to promote decentralization within the Ethereum network.

Key Relayer Leaves Ethereum; Raises Concerns of Centralization

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Thecoinrepublic.com

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