On September 15, 2022, Ethereum changed its consensus algorithm, moving from Proof-of-Work (PoW) to Proof-of-Stake (PoS). This event is commonly known as “The Merge”. While this change has considerably reduced the overall energy consumption, it has been observed that 40% of the first 1,000 blocks since then have been validated by a very limited amount of cryptocurrency holders. This raises serious questions about the decentralized nature of the system. To address this concern, and to mitigate the potential negative externalities of current Maximal Extractable Value (MEV) extraction strategies, the community has agreed to implement a permissionless, transparent, and fair ecosystem for MEV extraction. In this paper, after describing the new ecosystem, we perform an analysis of the blocks validated after Ethereum's “The Merge”. In particular, we analyze the actual distribution of validators by accounting for their activity both inside and outside the MEV ecosystem, and discuss how the scenario has changed in recent months.
Mancino, D., Leporati, A., Viviani, M., Denaro, G. (2023). Exploiting Ethereum after “The Merge”: The Interplay between PoS and MEV Strategies. In Proceedings of the Italian Conference on Cyber Security (ITASEC 2023) (pp.1-14). CEUR-WS.
Exploiting Ethereum after “The Merge”: The Interplay between PoS and MEV Strategies
Mancino, D;Leporati, A;Viviani, M;Denaro, G
2023
Abstract
On September 15, 2022, Ethereum changed its consensus algorithm, moving from Proof-of-Work (PoW) to Proof-of-Stake (PoS). This event is commonly known as “The Merge”. While this change has considerably reduced the overall energy consumption, it has been observed that 40% of the first 1,000 blocks since then have been validated by a very limited amount of cryptocurrency holders. This raises serious questions about the decentralized nature of the system. To address this concern, and to mitigate the potential negative externalities of current Maximal Extractable Value (MEV) extraction strategies, the community has agreed to implement a permissionless, transparent, and fair ecosystem for MEV extraction. In this paper, after describing the new ecosystem, we perform an analysis of the blocks validated after Ethereum's “The Merge”. In particular, we analyze the actual distribution of validators by accounting for their activity both inside and outside the MEV ecosystem, and discuss how the scenario has changed in recent months.
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