Flashbots, a blockchain researcher and infrastructure provider, has launched BuilderNet, which it claims will address the centralization challenges in the Ethereum blockchain. According to the report, this issue plagues the network’s block-building process.
Addressing Centralization Challenges in Ethereum
Flashbots clarified that the launch became necessary to tackle block builders’ challenges. For perspective, block builders are those who assemble transaction bundles into blocks. Upon completion, they submit the same to validators for maximal extricable value.
Some operators responsible for building 90% of Ethereum’s blocks are experiencing this centralization issue. This is, the block builders dominate the Ethereum process. These must compile transaction bundles and submit them for MEV, prompting centralization concerns.
MEV describes the maximum potential value that builders can extract from a blockchain transaction. This includes arbitrage and front-running of user transactions. Usually, block builders capture the profits from MEV on Ethereum, ascertain the transaction order, and relay it to Ethereum validators.
Flashbots Seeks Integrated Process Order Flow
With this launch, Flashbots wants a collaborative block-building approach to encourage multiple operators. These operators will work cooperatively to share and process order flow. The initial partners for this launch include block builder Beaverbuild, Flashbots, and Nethermind, an Ethereum client provider.
According to the firm’s statement, BuilderNet aims to neutralize exclusive MEV order flow deals. It will also enhance Ethereum’s censorship resistance and accelerate decentralization across rollups and apps. This will serve as a significant move towards fully decentralizing Ethereum’s block-building process.
Enhancing Privacy and Security
To guarantee improved security and performance, the system will utilize trusted execution environments. According to Flashbots, the idea is to create a conducive environment for MEV searchers and solvers by providing encrypted order flows. Additionally, it will enhance privacy and ensure fair distribution of MEV over time.
Flashbots have assured seamless integration as BuilderNet’s initial deployment will partner with the existing centralized builders. The journey towards a more decentralized arrangement will emerge by synergizing with centralized builders from the founding partners.
Stakeholders hope this will tackle the concerns regarding Ethereum’s centralization, which Vitalik Buterin, Ethereum co-founder, wrote about in May of this year. Interestingly, MEV issues were part of what Buterin wrote about in his publication.
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