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Ethereum Faces Growing Centralization Risk as MEV Practices Tighten Control

The $ETH network is grappling with rising concerns about centralization linked to maximal-extractable value (MEV) practices, as arbitrageurs, known as “searchers,” gain increasing control over how transactions are ordered. According to new research, these searchers often operate in-house or hold exclusive contracts with MEV builders — the entities responsible for constructing Ethereum blocks. MEV represents the extra profit that validators or network participants can earn by strategically reordering transactions within a block, typically using techniques like arbitrage, front-running, or sandwich attacks.

A recent paper, Measuring CEX-DEX Extracted Value and Searcher Profitability: The Darkest of the MEV Dark Forest, sheds light on how these searchers exploit price gaps between centralized exchanges (CEXs) and decentralized exchanges (DEXs), frequently front-running smaller traders. The study highlights that three builders — beaverbuild, Titan, and rsync — now dominate Ethereum’s builder market, with two of them vertically integrating their own CEX-DEX arbitrage operations. This trend raises alarms about Ethereum’s decentralization and security, as these dominant players gain monopolistic advantages, impose higher costs on proposers, and increase the risk of censorship or manipulation attacks.

While Ethereum’s Proposer-Builder Separation (PBS) aims to boost censorship resistance by letting proposers outsource block building, critics argue that PBS ironically concentrates power among a few major builders, creating unfair conditions for smaller network participants. In March, pseudonymous Ethereum researcher Malik672 suggested democratizing block building by opening it to thousands of contributors to strengthen decentralization. Meanwhile, Vitalik Buterin has proposed other ways to curb MEV’s impact — from alternative infrastructure to depriving arbitrageurs of the onchain data they need to execute complex transaction reordering. As of now, the research warns that about 80% of $ETH blocks come from just two proposers, intensifying concerns over fairness and the network’s decentralized ethos.

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