Recent trends on the Ethereum network have sparked a blend of unease and scrutiny among its user base. A lion’s share of Ethereum’s gas, the fuel for processing transactions on the network, is now consumed by private orders. Research conducted by Blocknative reveals that over 50% of Ethereum’s gas is being utilized for private transactions.
Comparatively, the private orders represent about 30% of the total Ethereum transactions. This significant proportion underscores the growing preference for a “dark pool” approach to transaction processing on the network. In such arrangements, transactions are routed directly to validators without being exposed to the public mempool, typically reserved for unprocessed transactions waiting to be picked up by miners and validators.
An emerging concern is the gatekeeping nature of this preference for dark pools, which limits transaction order flow to a select group of permissioned network participants. This exclusivity stands in stark contrast to Ethereum’s decentralized ethos and raises questions about new centralization risks.
The concentration of private order flow is not dispersed among a wide array of operators but is predominantly controlled by blockbuilders such as Beaver, Titan, Rsync, and Flashbots. The influence of these blockbuilders has surged dramatically, with their gas consumption swelling by a range of 130% to 150% since March.
The repercussions of this seismic shift in transaction processing are not inconsequential. For starters, the dominance of dark pools in the network leads to heightened volatility and unpredictability in gas prices for public transactions. As a greater fraction of transactions are processed privately, the external visibility into gas fees and their determinants wanes for the average user.
Looking ahead, it behooves the Ethereum community to assess the implications of this trend. The burgeoning use of private transactions not only alters the landscape of Ethereum’s transaction processing but also has significant ramifications for the principle of transparency and the balance between efficiency and centralization. As the network continues to evolve, ongoing dialogue and scrutiny remain critical to ensuring that Ethereum’s foundational principles are not undermined.
