Ethereum’s Decentralization at Risk? New EIP 7805 Could be the Solution

• EIP 7805 proposed to combat censorship by decentralizing block validation through enforced inclusion lists.
• FOCIL mechanism could enhance Ethereum’s resilience against MEV exploitation by mandating transaction inclusivity.

As Ethereum’s dominance in the blockchain sphere persists, concerns over the centralization of its block production have surfaced.

Currently, a staggering 95% of Ethereum (ETH) block production is controlled by just two entities, highlighting a potential vulnerability in the network’s structure—specifically, the risk of transaction censorship tied to advanced Maximal Extractable Value (MEV) strategies. 

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: 🧵 pic.twitter.com/BU8DXWcT71

— Jarrod Watts (@jarrodWattsDev) November 22, 2024

This centralization could undermine the blockchain’s foundational principle of decentralization

The upcoming Ethereum Improvement Proposal (EIP) 7805, also known as FOCIL (Fork-choice Enforced Inclusion Lists), is designed to address these concerns. 

Jarrod Watts from Abstract Chain emphasizes that this proposal could significantly enhance Ethereum’s resistance to censorship. By altering the dynamics of block validation, EIP 7805 aims to distribute the power more evenly among validators, reducing the influence of dominant block producers.

Under EIP 7805, before each block is finalized, a group of 16 validators will be randomly selected to form an inclusion list committee. Each member of this committee will be responsible for compiling a list of transactions from the mempool that must be included in the upcoming block. 

This process ensures that block builders incorporate these transactions, limiting their ability to prioritize or exclude based on potential profit from MEV activities . Validators will then only attest to blocks that adhere to these inclusion lists, enhancing the integrity of the block validation process.

While this proposal does not resolve all issues of centralization in Ethereum’s block production , it represents a significant step towards safeguarding the network against censorship and manipulation. 

This shift not only reinforces Ethereum’s commitment to its decentralized ethos but also secures its infrastructure against potential abuses that could erode trust in its transactional ecosystem.

Not only does EIP-7805 improve Ethereum’s censorship resistance properties, it also provides the first concrete proposal for block co-construction. If you believe that the future of block creation relies on multiple independent parties being able to provide input to co-create blocks an uphold chain neutrality, FOCIL provides the foundation upon which we can continue to build. – @soispoke

The broader Ethereum community remains optimistic about the network’s future , despite recent fluctuations in the ETH/BTC rate, which recently hit a low not seen since March 2021. 

The implementation of EIP 7805, part of a series of updates envisioned by Ethereum Foundation veteran Justin Drake, is seen as crucial to maintaining Ethereum’s competitive edge and ensuring its role as a leading platform in the evolving landscape of blockchain technology.