Ethereum researcher proposes solution to centralization issues

An Ethereum researcher has published a new proposal to provide a lasting solution to the current centralization issues on Ethereum. According to pseudonymous researcher Malik672, the solution will democratize the centralized block-building process on Ethereum.

In the proposal, Malik672 mentioned that the solution will implement a process called the “shared random algorithm” to achieve this process. He added that the proposal relies on leveraging Byzantine Fault Tolerance (BFT) to remove Maximal Extractable Value (MEV) at the block level. In turn, it will allow a fully democratized block proposal which will accelerate propagation.

He added that compared to the Proposer-Builder Separation (PBS), the proposal prioritizes trustlessness over-optimization, providing a transformative shift for Ethereum. Malik672 highlighted that due to Ethereum’s proof-of-stake model and the PBS feature migrating MEV concentration to an extent, builders and relays have become more centralized.

Ethereum researcher wants to remove centralization issues

In a previous report, a researcher with the Ethereum Foundation, Toni Wahrstätter, highlighted that only two Ethereum block builders, Beaverbuild and Titan Builder were responsible for building 88% of all the Ethereum blocks in the first two weeks of October 2024. The issue raised concerns around centralization on the second-largest blockchain in the crypto sector.

“This trend is primarily driven by the rise of private order flow (XOF), sold exclusively by certain apps. XOF reduces genuine competition among builders in the block auction, leading to a smaller pool of shared transactions,” Wahrstätter said at the time. He also added that the issue surrounding centralization would be less concerning if strong censorship resistance measures were in place, noting that Ethereum has been making progress on that front.

While the Ethereum researcher confirmed that the figure has been reduced to around 80%, he concedes that it is still concerning and far more centralized than the Ethereum community believes it should be. “This system flips that: block-building spreads to thousands of clients globally, fully democratizing the process. No single entity dominates—unlike PBS’s builder pool or a centralized mixer—and BFT mitigates mempool variance, ensuring robustness,” Malik672 said.

MEV, which translates to the value extracted by block proposers by reordering or censoring transactions has usually been subjected to a different range of profit-driven manipulation like arbitrage and front-running, with most of these activities coming at the expense of ordinary users on the network. Malik672 mentioned that the move is not in line with the decentralized ethos of Ethereum, showing the need to provide more decentralization on the network.

Malik672 proposes changes to block creation

According to the Ethereum researcher, under his proposal, blocks will be constructed using a cryptographically random algorithm. He also added that all Ethereum clients should be involved in the block construction process, instead of a handful of builders that would be responsible for more than 80% of the process. Malik672 noted that the random block creation process will take away profit-driven manipulation tactics that will affect all users.

The Ethereum researcher also added that the new proposal is in line with Ethereum’s vision of “trustless roots”, while noting that it will remain compatible with the Danksharding blob requirements, a solution designed to scale Ethereum layer-2’s. In addition, Malik672 believes that the solution will also boost slot times, reducing it from the usual 12 seconds to about 6-8 seconds.

However, the Ethereum researcher highlighted that some of the drawbacks of the proposal, including the gas-tip being sacrificed, the reduction in L2 efficiency, and the difference in mempools due to latency issues, which may cause the initial blocks proposed by clients not to be aligned. Meanwhile, he feels the pros outweigh the cons, as solutions can be found to some of the drawbacks listed.

The recent proposal is coming after Ethereum developers and researchers agreed to begin deploying Ethereum upgrades at a faster pace. According to the reports from the meeting, the researchers believe it would accelerate Ethereum’s tactical roadmap. The meeting, which had 25 participants including Ethereum Foundation researcher Tim Beiko, touched on several topics including the Pectra and Fuska upgrades.

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