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Ethereum News Today: Ethereum MEV Arbitrage Centralizes 80% Blocks Controlled by Two Entities
Coin WorldThursday, Jul 24, 2025 6:01 pm ET
2min read
Aime SummaryMaximal extractable value (MEV) arbitrage on
is consolidating into the hands of a few dominant entities, according to a recent research paper titled “Measuring CEX-DEX Extracted Value and Searcher Profitability: The Darkest of the MEV Dark Forest.” The study highlights how arbitrageurs, referred to as “searchers,” are increasingly forming exclusive partnerships with builders—entities responsible for constructing Ethereum blocks. This shift has led to a system where a small number of actors control a significant share of transaction ordering and profit extraction, raising concerns about the network’s decentralization and security [1].The paper notes that three builders—beaverbuild, Titan, and rsync—now dominate the Ethereum builder market. Two of these builders vertically integrate their own centralized exchange (CEX)-to-decentralized exchange (DEX) arbitrage operations, enabling them to optimize transactions for maximum profit. This vertical integration creates economies of scale that strengthen the dominance of these entities while reducing opportunities for smaller participants. The researchers caution that such arrangements could lead to monopoly pricing, proposer losses, and increased vulnerability to censorship or coordinated attacks [1].
The centralization trend is further exacerbated by Ethereum’s Proposer-Builder Separation (PBS) model, which allows block proposers to outsource block construction to builders. While PBS was designed to enhance censorship resistance, critics argue it has inadvertently concentrated power among a handful of builders. The paper underscores that 80% of Ethereum blocks are now proposed by just two entities, a statistic that highlights the network’s growing centralization risks [1].
The implications of this consolidation extend beyond transaction ordering. By controlling arbitrage strategies, dominant builders can prioritize transactions that maximize their own profits, often at the expense of smaller users. For instance, the paper describes how arbitrageurs exploit price discrepancies between CEX and DEX platforms, executing trades in milliseconds to siphon value before others can react. This dynamic not only skews transaction ordering but also reduces the network’s resilience to malicious activity, as centralized control points become attractive targets for attacks [1].
The legal and ethical dimensions of MEV centralization are also coming under scrutiny. A recent high-profile case involving the Peraire-Bueno brothers—MIT-educated individuals accused of tricking MEV bots into executing a $25 million exploit—has brought attention to the gray areas in MEV practices. While their actions were technically within Ethereum’s protocol, prosecutors argue they constituted fraudulent manipulation of the system. The case, set for trial in October 2025, could establish legal precedents for regulating MEV-driven arbitrage [1].
Ethereum co-founder Vitalik Buterin has previously proposed mitigating MEV by developing alternative infrastructure, such as more secure exchanges, and by limiting the data access available to arbitrageurs. He also suggested “starving” arbitrageurs of on-chain data critical for executing high-speed trades, though the feasibility of such measures remains debated [1]. Meanwhile, researcher Malik672 has advocated for democratizing block-building processes to allow broader participation and reduce centralization risks.
The centralization of MEV arbitrage underscores a broader tension in Ethereum’s development: balancing efficiency with decentralization. While optimized block-building enhances transaction throughput, the concentration of power among a few actors threatens the network’s foundational principles. The researchers stress that Ethereum’s future upgrades must address these centralization pressures to preserve security, fairness, and long-term sustainability. Solutions such as transparent block-building protocols or stricter transaction-ordering rules are being discussed, but their implementation remains contentious [1].
As the debate evolves, the Ethereum community faces a critical challenge: maintaining innovation in MEV optimization while preventing monopolistic control. The outcomes of ongoing legal cases, proposed upgrades, and governance discussions will likely shape the trajectory of MEV practices and the network’s resilience in the coming years.
Source: [1] [MEV Centralization Threatens Ethereum — Research](https://cointelegraph.com/news/mev-arbitrageurs-ethereum-centralized)
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