October 10, 2022
Friday night, Flashbots cofounder Stephane Gosselin announced on Twitter he stepped down from the company amid concerns about censorship and centralization.
Now that Ethereum has moved to a proof of stake consensus mechanism, the blockchain relies on validators to create blocks, not miners. These validators decide what transactions go into each block, and in what order. This is where the Flashbots and Maximum Extractable Value (MEV) come into play.
Flashbots is an organization that works to “mitigate the negative externalities of MEV.” It offers a service called MEV-Boost to help validators build the blocks in a way that maximizes revenue for them.Gosselin said he was leaving Flashbots due to “disagreements with his team.” Even though he didn’t say it plainly, he implied these disagreements concerned the fact that Flashbots has decided to comply with the US Treasury sanctions, which spiked censorship concerns across the Ethereum community.
“It is crucial for there to be a diverse and competitive MEV ecosystem to preserve censorship resistance,” he wrote.
According to the Flashbots transparency dashboard, 38% of all validators are using Flashbots services. Therefore, a significant amount of blocks are being built with some degree of censorship.
On the latest episode of The Chopping Block, there was a debate about Flashbots being a centralizing force on Ethereum and whether people actually understood the dynamics of MEV prior to the Merge. Haseeb Qureshi, managing partner at Dragonfly, argued that the MEV market will eventually “self-regulate.”
If you want to understand everything about MEV, here’s some coverage of Unchained that might get you up to speed:
