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In the first half of October, nearly 90% of all Ethereum blocks were produced by two main block producers, Beaverbuild and Titan Builder, raising concerns of centralization. The dominance is due to a phenomenon called private order flow (XOF) that reduces competitiveness among block creators. However, some analysts argue this is not a concern due to the separation of duties between proposers and builders. Still, concerns about powerful validators using maximal extractable value (MEV) incentives to influence the network persist. Increased censorship resistance could address this issue, while a 30% increase in Ethereum’s validator count over the past year also bodes well for decentralization.

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So, in the first half of October, two main Ethereum block producers were behind almost 90% of all blocks. These producers, Beaverbuild and Titan Builder, were causing some people to worry about too much control on the world’s second biggest blockchain network, as spotted by an Ethereum Foundation researcher, Toni Wahrstätter.

Wahrstätter mentioned that this trend came from something called private order flow (XOF), sold only by certain apps. XOF lessens the real competitiveness among block creators in the block auction, leading to fewer shared transactions.

Ethereum needs to maintain a balance of decentralization for its security. If centralized bodies control many transactions, they could theoretically favor some over others, which opposes the whole point of blockchain technology being decentralized.

But don’t fret, not everyone thinks this is a serious issue. Ryan Lee, from Bitget Research, says it’s not necessarily a cause for concern. In Ethereum’s core design, there’s a wall between the proposer and builder, so the proposer doesn’t know the exact contents of the block proposed by the builder. They only choose the most profitable block from multiple proposed blocks for validation and broadcasting.

This means that block producers can’t favor specific transactions. Neither builders nor validators can control which transactions are included or excluded, reducing worries about too much control in Ethereum.

However, some people are still anxious even with Ethereum’s strong consensus model. For instance, powerful validators using maximal extractable value (MEV) incentives could unequally influence the network, as pointed out by software engineer Kishan Kumar.

This control issue by the two block producers could be solved with stronger censorship resistance on Ethereum, according to Wahrstätter. While Ethereum is moving in the right direction in terms of censorship resistance, new challenges linked to control through XOF could still pop up.

On the plus side, Ethereum’s validator count has grown by over 30% in the past year, largely because of more institutional adoption of cryptocurrency. This is a good sign for the network’s decentralization.

Source: Cointelegraph