20 Sep 2022 Simon Briggs
Ethereum Struck By Centralization Concerns After The Merge
Flashbots are an essential part of the Ethereum ecosystem after the Merge. However, the use of flashbots is raising flags of concern over excess centralization.
In its essence, flashbots are dedicated to transparent and efficient Maximal Extractable Value (MEV) extraction, which acts as a relay for delivering Ethereum blocks. Indeed, mevboost.org data shows that a total of six active relays currently deliver at least one block in Ethereum.
Flashbots alone are responsible for 82.77% of all relay blocks, which is contributing heavily to Ethereum centralization. Furthermore, BitMEX highlighted the need for a complete redevelopment of Flashbots or a similar system. However, proponents of the Flashbots consider the system to be a decentralized autonomous organization (DAO).
Also, an analysis from Santiment clarified that 46.15% of Ethereum’s PoS nodes are controlled by only two addresses.
“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),” Bitwise’s Ryan Rasmussen explained.
Feds are going to put immense stress on the crypto sector
Ethereum is on a constant downhill slide since its Merge, but the problem with the negative price action is more global than Ethereum alone. It turns out that the Federal Reserve is preparing yet another interest rate hike as an answer to the Consumer Price Index (CPI), which was higher than the market expected.
“The Fed will not be easing any time soon, and it’s classic human nature because now we have the benefit of knowing how far in the mistakes they made by easing too much,” Bloomberg Intelligence’s senior commodity strategist Mike McGlone noted.
The Fed pressure also pushed cryptos like Bitcoin downwards, with the current crypto leader falling down below $18,500, retesting the lows from July. Other cryptos like Cardano, Solana, and Dogecoin also lost 13-15% in the past week, with the overall downtrend pushing the total crypto market capitalization down to $919.5 billion.Ethereum eth Ethereum news cryptocurrency news crypto news Crypto Price Ethereum Price federal reserve