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Examining the decentralized random block proposal in Ethereum: risks, impacts on validators, and lessons from other blockchain networks.
Is Ethereum trying to decentralize its block creation?
Ethereum is in a centralization pickle. Currently, about 80% of all Ethereum blocks are proposed by just two entities. But there's a new proposal on the horizon—one that aims to change all that. The decentralized random block proposal (DRBP) system is intended to randomly distribute block creation power among clients, potentially eliminating Maximal Extractable Value (MEV). But are we ready to embrace this shift?
The DRBP system seeks to give all clients, like Geth and Nethermind, a fair chance at selecting transactions and roll-up blobs from their local mempools. This would make it impossible for any single entity to predict transaction ordering, effectively sidestepping block-level MEV opportunities like arbitrage and front-running.
Interestingly, this proposal could also reduce Ethereum's block time from 12 seconds to between 6 and 8 seconds, aligning with the requirements of Danksharding. This could lead to a more efficient system, but at what cost?
While the DRBP sounds promising, it is not without its risks:
First, increased computational overhead is a concern. More block builders mean more computational power is required, which could lead to higher energy costs and possibly a new form of centralization among those with more resources.
Second, there's the risk of Sybil attacks. A decentralized model makes it easier for malicious actors to create multiple fake clients, which could skew block generation in their favor.
Finally, coordination could become a nightmare. The need for a high number of block builders to agree on a final result could slow down the system.
If MEV disappears, what happens to Ethereum's validators and builders?
For validators, the incentives to participate could shrink since they currently benefit from MEV through mechanisms like MEV-Boost. Would they still be motivated if their revenue stream evaporated?
For builders, the loss of MEV means a potential revenue hit. Would this lead to fewer builders or a shift in focus to different revenue streams?
Could we face new centralization challenges?
Increased computational overhead could favor the resource-rich, while coordination problems could give an edge to those who can manage complexities better.
Furthermore, issues with latency and different mempool states among clients could create opportunities for crafty actors to manipulate the network.
What insights can we glean from other blockchain networks regarding decentralized transaction ordering?
Decentralized sequencers provide more security and censorship resistance.
They are resilient and can lower fees by consolidating transactions.
Governance mechanisms from other networks may also shed light on the best way forward, emphasizing the need for balance between flexibility and efficiency.
In short, the decentralized random block proposal system offers a glimpse of what could be a more decentralized Ethereum. Yet, it also brings a host of questions and potential pitfalls. Are we ready to take that leap?
