Ethereum Researcher Proposes New Algorithm to Stop Insider Trading on the Network
Introduction
In the rapidly evolving world of blockchain and cryptocurrency, maintaining fairness and transparency is crucial. Recently, an Ethereum researcher, Malik672, proposed a novel algorithm aimed at combating insider trading on the Ethereum network. This development comes as a response to the growing centralization and potential for manipulation within the network. Let’s dive into the details of this proposal and its implications.
The Problem of Centralization
Ethereum, like many blockchain networks, faces challenges related to centralization. This issue arises when a few entities control a significant portion of the network’s operations, such as block building. In October 2024, it was noted that nearly 89% of Ethereum blocks were handled by just two block builders, Beaverbuild and Titan Builder[3]. Although this figure has decreased to about 80% as of February 2025, it still highlights a significant concentration of power[3].
The Proposed Algorithm
Malik672’s proposal involves using a decentralized random block proposal system. This system would distribute block building across thousands of clients worldwide, utilizing a cryptographically random algorithm to construct blocks[3]. The goal is to eliminate block-level Maximal Extractable Value (MEV), which allows insiders to exploit market information for personal gain. By democratizing block proposing, the network aims to align more closely with its decentralized ethos[3].
How It Works
The proposed system leverages Byzantine Fault Tolerance (BFT) to ensure the network remains operational even if dishonest nodes attempt to manipulate it[3]. Validators execute blocks, achieving consensus through BFT, which requires a significant majority of honest nodes to agree on the state of the blockchain[3]. This approach not only reduces MEV but also enhances the network’s trustlessness and fairness.
Potential Drawbacks
While the proposal offers several benefits, it also comes with potential drawbacks. One major concern is the increased computational overhead, which could slow down the network[3]. Additionally, there is a risk of Sybil attacks, where a malicious actor creates multiple fake clients to gain more influence[3]. Lastly, the complexity of decision-making could increase due to the involvement of numerous block builders, potentially leading to more disputes over transactions[3].
Conclusion: A Step Towards Decentralization
Summary and Future Directions
Malik672’s algorithm represents a significant step towards achieving true decentralization on the Ethereum network. By addressing the centralization issue and reducing the potential for insider trading, this proposal aligns with Ethereum’s core values of fairness and transparency. However, it is crucial to thoroughly test and refine this system to mitigate its potential drawbacks. As blockchain technology continues to evolve, innovations like these will be essential in ensuring that networks remain secure, equitable, and decentralized.
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Sources:
– zycrypto.com
– theoverspill.blog
