According to a report brought to light by researcher Frank Topbottom, Ethereum miners manipulate the blocks. They would be doing this with the intention of taking advantage of the rise of decentralized finance (DeFi), it is an action that is not illegal according to the rules of this network.
The power of Ethereum miners is an unquestionable fact even for those who have little knowledge of the Blockchain network. They can edit the blocks and modify them.
Regarding the complaint made by Topbottom, he assures that he detected several cases of Miner’s Extractable Value (MEV). Above all, in smaller groups such as Sparkpool, F2Pool, in which a small group of addresses appeared first despite having lower GAS rates.
What is the MEV with which Ethereum miners manipulate the blocks?
The Value Extracted from the Miner or MEV, is an action that consists of “playing dirty” against other participants in the processing of a block. The manipulative miners are placed first, displacing others who are playing fair on the Blockchain network.
The MEV can be used for multiple actions, including arbitrage transactions, auction settlements and token offerings, CoinTelegraph notes. It is an ability to reorder the order of the blocks to get the best of it. On the Ethereum Blockchain network, this action is not illegal and miners have no prohibition on it.
Despite this, specialists emphasize, it is a dirty game, which leaves out other miners attached to fair competition.
Guardians or exploiters
The aforementioned ability of Ethereum miners to reorder blocks could be an advantage for the network, but at the same time it could be a negative. Topbottom says this gives miners the ability to slow down non-miners, overtaking them.
It ensures that users dedicated to mining, with their high maneuverability, could be the guardians of the entire network. For example, they could avoid situations such as those witnessed on so-called Black Thursday.
It should be remembered that, after the sudden drop on Black Thursday, GAS rates soared. These two factors were critical for MakerDAO, who, in response, decided to start an auction with which they sought to maintain their peg to the USD.
This type of offers USD 0 like the one applied by MakerDAO, they can be neutralized by miners and their ability to modify the blocks. The downside is that, at the same time, the miners could launch their own USD 0, harming the legitimate participants of the auction.
Steal loot that others have legitimately earned
Another important aspect to highlight and that has generated debate in forums and social networks, is that Ethereum miners manipulate the blocks with very bad intentions. Competition for high-value MEVs could incentivize the reorganization of the blocks to steal the profits of others.
With these types of actions, the most affected would be the average miners, who would receive the punishment of having their transactions canceled even after they have been confirmed.
Other complaints have been made about how vulnerable Ethereum blocks can be to manipulation. For example, those carried out by frontunners, through bots.
Data to take into consideration
- Preventing miners from exploiting DeFi is complex because it is not an illegal action within the Ethereum network.
- The manipulation of the blocks by the Ethereum miners, through MEV, places them ahead of other miners, even having lower GAS fees.
- Researcher Frank Topbottom says he has detected many cases of block manipulation.
- Most of the MEV cases come from small mining pools like F2Pool.