Ethereum block production is extremely centralized.
95% of Ethereum's blocks are made by 2 entities, leading to the potential for transaction censorship.
EIP-7805 introduces FOCIL, a way to preserve Ethereum’s censorship resistance.
Here’s how it works: 🧵
95% of Ethereum's blocks are made by 2 entities, leading to the potential for transaction censorship.
EIP-7805 introduces FOCIL, a way to preserve Ethereum’s censorship resistance.
Here’s how it works: 🧵
Justin Drake's Beam Chain proposal includes 9 major upgrades.
Upgrade #1 is to improve censorship resistance.
But why? Isn't Ethereum meant to be decentralized?
Let's quickly cover how the block-building process has evolved to where it is today.
Upgrade #1 is to improve censorship resistance.
But why? Isn't Ethereum meant to be decentralized?
Let's quickly cover how the block-building process has evolved to where it is today.
By staking 32 ETH to run an Ethereum validator, occasionally, you get to propose the next block in the chain and get rewarded.
In theory, this means block creation would be decentralized amongst the validators.
So, how do 95% of Ethereum blocks get made by 2 entities...?
In theory, this means block creation would be decentralized amongst the validators.
So, how do 95% of Ethereum blocks get made by 2 entities...?
We need to cover three topics quickly to understand how we got to this 95% number:
1/ Maximal Extractable Value (MEV)
2/ MEV-Boost
3/ Proposer-builder separation (PBS)
I'll explain each of these simply, before diving into how EIP-7805 fixes things.
1/ Maximal Extractable Value (MEV)
2/ MEV-Boost
3/ Proposer-builder separation (PBS)
I'll explain each of these simply, before diving into how EIP-7805 fixes things.
1/ MEV.
To create a block, you pick transactions from the mempool (waiting area).
By carefully picking what transactions you include and exclude & the order in which those transactions happen, you can maximize your profit.
This profit extraction/maximization is called MEV.
To create a block, you pick transactions from the mempool (waiting area).
By carefully picking what transactions you include and exclude & the order in which those transactions happen, you can maximize your profit.
This profit extraction/maximization is called MEV.
2/ MEV Boost
Some people are extremely good at profiting from MEV.
They are so good, that they're willing to pay a fee to create blocks, as they can profit from the MEV.
Validators, using MEV-Boost, can increase their profit by selling their blocks to these block builders.
Some people are extremely good at profiting from MEV.
They are so good, that they're willing to pay a fee to create blocks, as they can profit from the MEV.
Validators, using MEV-Boost, can increase their profit by selling their blocks to these block builders.
3/ PBS
What we just described is Proposer-builder separation.
Instead of the validators’ building blocks and proposing them, most validators participate in this market that MEV-Boost offers.
Where “professional” block builders create blocks and pay validators to propose them.
What we just described is Proposer-builder separation.
Instead of the validators’ building blocks and proposing them, most validators participate in this market that MEV-Boost offers.
Where “professional” block builders create blocks and pay validators to propose them.
So this is how we arrived at the point we are today.
Where 2 block builders create over 95% of Ethereum blocks:
- Beaverbuild: ~55%
- Titanbuild: ~41%
This is an issue, because these block builders may choose to censor your transactions if it is not profitable for their MEV.
Where 2 block builders create over 95% of Ethereum blocks:
- Beaverbuild: ~55%
- Titanbuild: ~41%
This is an issue, because these block builders may choose to censor your transactions if it is not profitable for their MEV.
EIP-7805 is a proposal to fix this transaction censorship risk.
It introduces FOCIL: Fork-choice Enforced Inclusion Lists.
It ensures that transactions cannot be censored by block builders.
It introduces FOCIL: Fork-choice Enforced Inclusion Lists.
It ensures that transactions cannot be censored by block builders.
With EIP-7805, in each slot (before each block), a set of 16 validators is selected as “inclusion list committee members”.
Each committee member creates their own "inclusion list"; a list of transactions from the mempool that must be included in the next block.
Each committee member creates their own "inclusion list"; a list of transactions from the mempool that must be included in the next block.
Block builders MUST include transactions from these inclusion lists.
Validators can only vote (attest) for blocks that include all transactions from inclusion lists.
Blocks that do not include those transactions will not be considered valid, and won’t become part of the chain.
Validators can only vote (attest) for blocks that include all transactions from inclusion lists.
Blocks that do not include those transactions will not be considered valid, and won’t become part of the chain.
While this likely won’t reduce the centralization in block creation, it is a big win for Ethereum’s censorship resistance.
EIP-7805 brings more power back to validators by allowing them to declare specific transactions that block builders must include (not censor).
EIP-7805 brings more power back to validators by allowing them to declare specific transactions that block builders must include (not censor).
This is my second thread as part of my pledge to make digestible Ethereum content.
If you’d like to see more, please
- Consider following me!
- Engage with the original post below for the algo
If you’d like to see more, please
- Consider following me!
- Engage with the original post below for the algo
https://x.com/jarrodWattsDev/status/1859764880691298713
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