Blocknative has said that it is withdrawing its operations or discontinuing its offering as a relayer. This officially brings the upcoming number of relayers for Ethereum to four. The community is now in splits about how things will work out, for the discontinuation is tentatively scheduled for September 27, 2023, at 8 a.m. PST.
The community is concerned about the fact that Ethereum could soon be on the way to centralization. This is merely speculation but has caused doubts anyway. The remaining four block builders now handle approximately 90% of Ethereum transactions.
Blocknative has justified the move by saying that it is no longer financially viable for them to continue working as a block builder or relayer.
First things first, a relayer plays a very important role in connecting users to the blockchain. Relayers are solely responsible for batching and broadcasting transactions, making sure that the network functions efficiently and timely. The remaining four relayers on the network are bloXroute, Ultrasound, Agnostic, and Flashbots.
Experts have echoed that Blocknative had to leave the ecosystem because of a small percentage that remained in the air. Reportedly, the percentage dedicated to Blocknative was around 9.64%.
Blocknative has confirmed the development in an announcement wherein it has assured the community that the Data API will function as usual for data downloads till October 4, 2023.
One way to strengthen the decentralization structure is by fixing the economic incentive problem. Uri Klarman from bloXroute has said that the only way to stop the perception of centralization of MEV-boost relays from getting worse is by handling the economic incentive problem. The Chief Executive Officer of the venture has further stated that there could be fewer relays if Ethereum decides to keep things unchanged.
There is already speculation that Ethereum may not be able to rely on only four relayers in the foreseeable future. Rated’s chief executive officer, Elias Simos, has said that they are ambivalent toward a future in which Ethereum relies on four relayers.
What first triggered the idea of discontinuing the block-building service was Ethereum’s transition to the Proof-of-Stake mechanism. It ideally made the roles of block proposer and block building a distinct process. Thereby, most of the well-resourced block builders started running their own relays.
MEV-boost software was introduced to fuel efficiency between builders and proposers. Now, all Ethereum transactions use the said relay, with nearly 93% of blocks being created via MEV-boost.
Blocknative has recommended the community modify the configurations to avoid receiving error messages. This pertains to validators, third-party block builders, searchers, and Blocknative protect users. Users stand at risk of facing 503 error codes if these segments are not modified per the latest trend.
Moving forward, Blocknative focuses on investing in economically viable spaces to avail opportunities that align with their interests, values, and capabilities.