Ethereum (ETH) Becomes Censorship-Resistant With This Upgrade

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As a seasoned crypto investor with a decade of experience under my belt, I can’t help but feel a mix of concern and optimism when it comes to Ethereum (ETH). The 95% centralization of block production is indeed a worrying trend, opening the door for potential transaction censorship opportunities. This isn’t just about the second-largest blockchain; it’s about the very essence of decentralization that we all strive for in this space.

Currently, two major block producers account for approximately 95% of all Ethereum (ETH) blocks, raising concerns about potential opportunities for transaction censorship through sophisticated MEV strategies. However, Jarrod Watts of Abstract Chain suggests that EIP 7805, an upcoming Ethereum upgrade, could help prevent this issue in the second largest blockchain.

EIP 7805 to protect Ethereum (ETH) from transaction censorship: DevRel opinion

Currently, Ethereum (ETH), the second-largest blockchain network, may be susceptible to transaction censorship due to its significant centralization in block production. This centralization is so extreme that approximately 95% of blocks are controlled by just two entities. One potential solution for this issue is Fork-choice Enforced Inclusion Lists (FEIL), an eagerly awaited upgrade, as suggested by Jarrod Watts, a DevRel at Abstract Chain.

The process of creating blocks in Ethereum is heavily dominated by just two entities, which raises concerns about the possibility of transaction suppression.

— Jarrod Watts (@jarrodWattsDev) November 22, 2024

One way to rephrase this in a more natural and easy-to-read manner is: The issue that hinders Ethereum’s (ETH) decentralization comes from MEV, or the power certain network participants have to control the order of transactions in the ETH queue.

In simpler terms, if more dominant players were to implement MEV strategies, it could potentially jeopardize the decentralized nature and accessibility of Ethereum’s transaction verification because the Beaverbuild and Titanbuild collectives account for nearly all (95%) of the verification process.

Activating EIP 7805 means, in every slot (preceding each block), a group of 16 validators will be chosen as “inclusion list committee members.” Each selected validator will then generate their own “inclusion list,” which is essentially a collection of transactions drawn from the mempool that they believe should be incorporated into the upcoming block.

Watts clarifies that this phase will weaken the influence and potential for extra gain of block constructors.

As a researcher, I recommend that block builders incorporate transactions listed in the specified inclusions to ensure validity. It’s important to note that validators can only attest to blocks containing all transactions from these inclusion lists. Blocks failing to include such transactions will not be deemed valid and will consequently not contribute to the chain.

He admitted that this would not solve all centralization issues in block production but will definitely make Ethereum (ETH) more censorship-resistant.

Ethereum (ETH) community still optimistic despite ETH/BTC hitting new lows

In terms of validation design, EIP 7805 will bring the power back to validators, DevRel concluded.

The proposed upgrade is a part of novel vision for Ethereum (ETH) suggested by EF veteran Justin Drake, the so-called “Beam Chain.” It includes nine crucial updates for Ethereum’s (ETH) tech structure and transactions processing procedure.

Currently, Ethereum (ETH) is struggling to match the pace of the initial cryptocurrency bull run. On November 21st, the ETH/BTC rate dipped to 0.03196, a level not seen since March 2021, indicating that Ethereum has never been less competitive against Bitcoin in the current crypto market cycle.

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2024-11-22 18:30