Ethereum’s Decentralization Takes a Hit as the Number of Relayers Drops to 4

The number of relayers for the Ethereum Blockchain has dropped to four, which is raising the fear of increased centralization. Over 90% of blocks are now going to be handled by four major builders: bloXroute, Flashbots, Ultrasound, and Agnostic.

Uri Klarman, CEO of relaying entity Bloxroute, shared the reason for Blocknative’s decision.

One of the top 5 relayers, Blocknative, dropped its MEV-boost relay services to maintain benefits. The four remaining relayers do not charge any fees for the services they provide, rendering this core of Ethereum infrastructure unviable in terms of profitability for those operating it.

Relayers are essential to the Ethereum transaction settlement process. Through the batching and broadcasting of transactions, they guarantee prompt and effective processing, closing the gap between users and the blockchain. With Blocknative’s exit, the relayer landscape is becoming more and more concentrated.

After Ethereum made the switch to proof-of-stake, proposing and creating blocks were two different procedures. To enable an effective market between these proposers and builders, MEV-boost software was created. Only the top 5 block builders are responsible for proposing 98% of ETH blocks.

Data gathered on mevboost.pics show that 93% of Ethereum blocks generated in the last 14 days used MEV-boost. Blocknative states that it discontinued its MEV-boost relay services as it was no longer profitable. The proposal to provide a small percentage for relayers was still not settled. After internal discussions, they arrived at this decision and decided to suspend the MEV-Boost relay service and associated Ethereum block builders on Tuesday (September 27) to become economically viable.

A new proposal of Flashbots aims to establish a “PBS Guild” that would ask for contributions from the Ethereum community to reward relayers. Uri Klarman says that a relayer fee mechanism should be implemented and suggests that even some Blockbuilders expect the same.

However, Klarman believes that the centralization of MEV-boost relays might worsen if the issue with economic incentives isn’t resolved. The CEO of Ethereum data platform Rated, Elias Simos, expressed his ambivalence regarding a scenario in which Ethereum stays dependent on its four main relayers in an interview with Blockworks.