A recent Bank of America Report argues that Ethereum’s long-term viability depends on scalability, even as OFAC censorship issues loom large post-Merge.
According to the report, Ethereum’s first-mover advantage drew decentralized app developers who now face the prospect of network congestion until sharding goes live.
Ethereum’s Low Transaction Throughput and Censorship Threaten Use
Data from Blockchair suggests that the Ethereum network processed under 15 transactions per second on March 12, 2023.
Another issue threatening Ethereum’s future is validators choosing only to process transactions for Ethereum addresses that the U.S. Office for Foreign Assets Control approves.
After the Ethereum Merge, validators bundle transactions into blocks and broadcast them. Proposer-builder separation allows builders to construct transaction blocks and offer them to a block proposer. The proposer chooses the most profitable transaction block.
Separating the builder and proposer roles means that transactions are less likely to be censored.
MEV-Boost is software validators use to boost returns by subcontracting block production to the highest bidder. Validators can configure their software to accept blocks from certain MEV-boost relays, including those from Flashbots. Boost relays that omit transactions from sanctioned blocks threaten the neutrality of the Ethereum network.
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Author: David Thomas
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