The power structure of what is arguably the most commercially importantcryptocurrencies network is at risk of being altered by the upcoming upgrade ofEthereum.
Under the current system, networks of computers called miners take transactions from a pool and arrange them into blocks that are added to the ledger. There is a plan to reduce energy consumption. The builders will gather transactions into blocks and send them to the validators after the September upgrade. The order of the blocks that will be used in the upgrade will be signed off by the validators.
This change, part of the software upgrade that is called MEV-Boost, could potentially make ether more centralized at first. There are more than 400,000 validators lined up to order transactions, but only a few of them are willing to build. There is open-sourced software used by trading bot.
In order to collect fees from traders, miners use flashbots, which allow them to step around others. Some people are considering becoming builders because they are concerned about the control that certain entities have over others.
The chief executive officer of BloXroute Labs said that it kills decentralization by letting traders send transactions to miners faster. He said that about 40% of the trading volume is routed through the network.
One risk is that a powerful digital wallet like MetaMask, which gives users the ability to buy, sell and receivecryptocurrencies, could become a "king maker." The most popular non-custodial wallet is MetaMask.
The flow of transactions could be controlled by a wallet service that favors one builder over everyone else.
The New York-based ConsenSys is the owner of MetaMask. The concern is dismissed by the company.
Taylor Monahan is the global product lead at MetaMask. Metamask is a gateway to an exciting, vibrant, diverse and fair community. For that reason, MetaMask will always try to make decisions that promote a healthy and undefiled ether.
The split of the builder-validator role was conceived as a way to increase the decentralization of the project.
Potential issues are raised by having too few builders on the upgraded ethereum chain. Transactions could be blocked from being included. The mixer protocol was blacklisted by the US Treasury Department.
If there are very few builders, they can make more money. It's possible that fewer people will choose to support the network. The transaction reorganization service, called MEV, has earned $240 million for miners. validators' revenue is expected to be helped by the fees.
Builders can take advantage of the order flow. If a builder is aware that a lot of users are placing orders for a token, they could buy a long position in it.
It is similar to Robinhood, making money off order flow. He said that he and his partners are thinking of becoming builders.
There are other people who are considering a change in focus because of the risks.
The situation will be monitored. "If it gets closer to a centralized builder world, we'll take action."
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