Unveiling Ethereum's Hidden Centralization Incentives: Does Connectivity Impact Performance?

Modern public blockchains like Ethereum rely on p2p networks to run distributed and censorship-resistant applications. With its wide adoption, it operates as a highly critical public ledger. On its transition to become more scalable and sustainable, shifting to PoS without sacrificing the security and resilience of PoW, Ethereum offers a range of consensus clients to participate in the network. In this paper, we present a methodology to measure the performance of the consensus clients based on the latency to receive messages from the p2p network. The paper includes a study that identifies the incentives and limitations that the network experiences, presenting insights about the latency impact derived from running the software in different locations.Comment: THE FIFTH INTERNATIONAL CONFERENCE ON BLOCKCHAIN COMPUTING AND APPLICATIONS (BCCA 2023

Autopsy of Ethereum's post-merge reward system

Like most modern blockchain networks, Ethereum has relied on economic incentives to promote honest participation in the chain's consensus. The distributed character of the platform, together with the "randomness" or "luck" factor that both proof of work (PoW) and proof of stake (PoS) provide when electing the next block proposer, pushed the industry to model and improve the reward system of the system. With several improvements to predict PoW block proposal rewards and to maximize the extractable rewards of the same ones, the ultimate Ethereum's transition to PoS applied in the Paris Hard-Fork, more generally known as "The Merge", has meant a significant modification on the reward system in the platform. In this paper, we aim to break down both theoretically and empirically the new reward system in this post-merge era. We present a highly detailed description of the different rewards and their share among validators' rewards. Ultimately, we offer a study that uses the presented reward model to analyze the performance of the network during this transition.This work has been supported by the Lido Ecosystem Grant Organization (LEGO), the Ethereum Foundation under the Research Grant FY21-0356, and Protocol Labs under its Ph.D. Fellowship Program FY22-P2P.Peer ReviewedPostprint (author's final draft