For a couple of years now, MEV-Boost relays or Flashbots have become popular tools in order to gather the maximum value that can be extracted from Ethereum’s block production. However, in recent times, Flashbots have been controversial as people believe the technology threatens Ethereum’s censorship-resistance. This is because Flashbots account for 48% of blocks that are compliant with government-enforced regulations.
Nakamoto Coefficient or Government Coefficient? — Crypto Users Complain That OFAC-Compliant Flashbots Have Stained Ethereum’s Censorship-Resistance
While Ethereum has been complimented for meeting the demands of environmentalists, critics believe the blockchain network made a trade-off by increasing validator centralization, and the probability of rising censorship for a so-called ‘greener’ blockchain. The day after The Merge, when Ethereum transitioned from a proof-of-work (PoW) network to a proof-of-stake (PoS) blockchain, PoW supporters criticized Ethereum over the increased possibility of validator censorship. Data had shown that more than 59% of all the staked ethereum (ETH) was held by four companies.
I have never been more excited about the future of Flashbots. https://t.co/hSgI2XMFDG
— @bertcmiller ⚡️🤖 (@bertcmiller) October 14, 2022
Although, some people dismissed the critics, like the Bitcoin supporter and blogger Eric Wall, who told his Twitter followers that the liquid staking company “Lido isn’t even a pool.” Wall further noted that “Lido can’t decide what blocks anyone of their underlying node operators mine.” Following the topic of increasing validator centralization, another discussion concerning the use of Flashbots or MEV-Boost relays has heightened. Flashbots emerged in November 2020, and researchers from Bitmex describe what MEV-Boost relay technology does in a Flashbots report published last May.
“Flashbots works as follows — Searchers analyse the blockchain and memory pool for MEV opportunities,” the Bitmex report on Flashbots explains. “When they find such an opportunity they create a transaction or bundle of transactions which exploits it. They then submit these transactions to the centralised Flashbots server. These transactions also include a payment for the miners. The idea here is that a searcher will no longer bother broadcasting their MEV transactions to the memory pool anymore and will only use the Flashbots system.”
Close to Half of Ethereum’s Daily…
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