Private transactions have increasingly dominated Ethereum order flow as users aim to safeguard their trades from frontrunners, according to an August 20 report by Blocknative.
Although private transactions account for only about 30% of all Ethereum transactions, they consume more than half of the gas used on the network. This trend introduces new centralization vectors, as private transaction order flow is only accessible to permissioned network participants, the report highlighted.
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Private transactions involve sending trades directly to a validator, bypassing the public queue, in what is known as a “dark pool”. Public transactions are at risk of being front-run by automated trading bots that exploit maximum extractable value (MEV) at the expense of users.
Blocknative notes that users typically opt for private transactions to protect against MEV, especially during more complex and gas-intensive on-chain actions like swaps, which consume more gas than non-MEV transactions.
The report identified a few key blockbuilders – Beaver, Titan, Rsync and Flashbots – that have significantly increased their private order flow since March, with gas consumption for these builders rising by 130% to 150%.
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The rise of dark pools has negatively impacted users participating in the public transaction queue, resulting in more volatile and unpredictable gas prices. The report warns that reduced transparency in gas fees could lead to users either underpricing their transactions, causing them to get stuck, or overpricing to ensure their transactions are processed.
Cre: cointelegraph.
I’m Jessi Lee, currently living in Singapore. I am currently working as a trader for AZCoin company, with 5 years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
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