Ethereum News Today: Ethereum MEV Arbitrage Centralizes as 80% of Blocks Proposed by Top 2 Entities

Maximal-extractable value (MEV) arbitrage on Ethereum is consolidating into a more centralized structure, 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 a growing concentration of power among arbitrageurs—referred to as “searchers”—who increasingly operate in-house or under exclusive contracts with block builders. These builders, responsible for constructing Ethereum blocks, are dominated by a small number of entities, including Beaverbuild, Titan, and rsync, two of which integrate their own centralized (CEX)-to-decentralized (DEX) arbitrage capabilities [1]. The researchers warn that such vertical integration creates economies of scale for dominant players, enabling monopoly pricing that harms proposers and increases vulnerabilities to censorship and attacks [1].

The centralization trend arises from 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, the paper argues it has instead fostered unfair advantages for large-scale arbitrageurs. By exploiting transaction ordering and price discrepancies between CEX and DEX platforms, these actors extract profits through strategies like front-running and sandwich attacks. The researchers note that 80% of Ethereum blocks are currently proposed by just two entities, further undermining decentralization [1].

Ethereum co-founder Vitalik Buterin has previously suggested mitigating MEV by limiting arbitrageurs’ access to on-chain data critical for profit extraction. He also emphasized the need for alternative infrastructure, such as decentralized exchanges, to reduce reliance on centralized price differences [1]. Meanwhile, pseudonymous researcher Malik672 proposed democratizing block building to allow broader participation, arguing that decentralization hinges on distributing construction rights across thousands of participants rather than a few builders [1].

The implications for Ethereum’s decentralization are significant. As arbitrageurs and builders collaborate more closely, the transaction validation process becomes opaque, favoring well-capitalized actors with advanced technical resources. This dynamic creates barriers for smaller participants, reducing diversity in the ecosystem and raising concerns about equitable fee distribution. The researchers caution that collusion and monopolistic behavior could distort market mechanisms, prioritizing profit over fairness [1].

Critics argue that the current MEV landscape prioritizes efficiency at the expense of Ethereum’s foundational principles. While MEV strategies are not inherently problematic, their increasing centralization risks eroding trust in the network’s governance model. Proposals to address this include on-chain auction mechanisms or decentralized block builder pools to redistribute MEV gains more equitably. However, implementing such solutions requires consensus among stakeholders, a challenge given the network’s evolving priorities.

The debate underscores a tension within Ethereum’s community: balancing innovation with decentralization. Proponents of MEV argue that it drives liquidity and price efficiency, but opponents stress the systemic risks of unchecked centralization, including censorship or monopolistic control. As the network evolves, the balance between maximizing value extraction and preserving decentralization will remain a critical focus for developers and policymakers [1].

Sources:

[1] [MEV Centralization Threatens Ethereum — Research](https://cointelegraph.com/news/mev-arbitrageurs-ethereum-centralized)

[2] [Centralization Concerns Rise in Ethereum's MEV Practices](https://www.binance.com/en/square/post/27393442295690)

[3] [Micro Ether Futures (Jan 2026) Trade Ideas - CME](https://www.tradingview.com/symbols/CME-MET1%21/ideas/?contract=METF2026)

[4] [Appeals Court Reverses Yuga Labs NFT Judgment](https://cryptorank.io/news/feed/53d33-appeals-court-reverses-yuga-labs-nft-judgment)