MEV pertains to the potential profit that blockchain validators or other players can secure by rearranging transactions within a block prior to its finalization. In the Ethereum ecosystem, MEV generally employs tactics such as arbitrage, front-running, or sandwich attacks, where traders capitalize on price discrepancies to boost their profits.

The paper, named “Measuring CEX-DEX Extracted Value and Searcher Profitability: The Darkest of the MEV Dark Forest,” examined how arbitrageurs exploit price differences between centralized (CEX) and decentralized (DEX) crypto exchanges, thereby outpacing minor users.

The report’s authors noted that “at the time of writing, three builders, beaverbuild, Titan, and rsync, control the Ethereum builder market, two of which integrate their own CEX-DEX searchers vertically.” They added that this integration raises significant issues regarding Ethereum’s decentralization and security, as it promotes economies of scale favoring dominant players, enables monopoly pricing leading to proposer loss, and heightens the risk of censorship and commitment attacks.

The study concluded that the monopolization of CEX-DEX arbitrage via exclusive contracts with block builders intensifies the “centralization pressures” within Ethereum’s ecosystem. As a result, it is crucial to consider this when determining the future path and expansion of the layer-1 network.

Under Ethereum’s Proposer-Builder Separation (PBS), block proposers can delegate the task of block construction to entities known as builders to enhance censorship resistance. However, the research paper’s authors and other critics of PBS argue that this system centralizes the network and creates an unfair market environment for smaller participants.

In March, anonymous Ethereum researcher Malik672 suggested that the process of Ethereum block building should be democratized, allowing a vast number of participants to contribute to block building and improve network decentralization. “With 80% of blocks currently proposed by just two entities. This compromises decentralization and fairness,” the researchers observed.

Ethereum’s co-founder, Vitalik Buterin, had previously proposed to address MEV by developing alternative infrastructure, incorporating crypto exchanges. Buterin also suggested that MEV could be reduced by depriving MEV arbitrageurs of the onchain data they need to profit from intricate trades and transaction reordering.

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The on-chain analytics firm, Santiment, in a fresh publication, detailed the supply concentration levels of various cryptocurrencies, including Shiba Inu, Ethereum, Pepe, USDT, USDC, DAI, Chainlink (LINK), and Uniswap (UNI).

The graph illustrates that USDC, a stablecoin, has the lowest supply concentration in the top 10 wallets, around 27%. Chainlink and DAI follow suit with supply centralization levels at 32% and 33%, respectively. Conversely, Uniswap and Ethereum exhibit high levels of centralization, with 51% and 49% of their respective supplies held by the top 10 wallets.

However, Shiba Inu proves to be the most centralized, with the top ten whales holding an enormous 62% of the total supply. Comparatively, Pepe, another memecoin, has a supply centralization of 39%.

For any cryptocurrency, a high level of supply centralization is generally viewed as a negative indication for stability, given that tokens represent power within the network. This is particularly relevant for proof-of-stake (PoS) assets like Ethereum.

Santiment cautions retail traders that it is often safer to hold coins with less supply held by the top whales. This mitigates the risk of sudden price drops or market manipulation should these whales decide to liquidate their positions.

Given this, cryptocurrencies like Ethereum, Uniswap, and especially Shiba Inu, which have a significant proportion of their supply in the hands of the top ten whales, may currently be in a precarious position.

In related news, the cryptocurrency market sentiment is nearing extreme greed, as per the Fear & Greed Index. This index computes a score ranging from zero to hundred based on various factors to gauge investor sentiment. Currently, the index stands at a substantial 73, indicating a strong presence of greed among traders.

Historically, market movements have often defied crowd expectations, particularly at the extreme ends of the index. While the market is not yet in the extreme greed zone, it is teetering on the edge.

At the time of writing, Shiba Inu’s price stands at approximately $0.0000115, rising over 3% in the past week.

The post Top 10 Whales Control 62% of Shiba Inu Supply, Outpacing Other Major Cryptocurrencies appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.

PayPal’s recent introduction of the PYUSD stablecoin has stirred a whirlwind of debate within the cryptocurrency community, primarily centered around the coin’s centralization. The ability of PayPal to halt stablecoin transfers and freeze user addresses has been a significant point of contention. Voices from the crypto realm have taken to platforms like X (previously known as Twitter) to shed light on these potentially problematic aspects.

Altcoin Daily, a prominent crypto influencer, released a video on YouTube, emphasizing the issues associated with the dollar-tied PYUSD stablecoin. This discussion has rekindled the age-old argument about the extent of centralization in crypto assets, which seemingly contradicts the foundational decentralized ethos of cryptocurrencies.

Upon examining the underlying smart contract of PYUSD, crypto specialists discovered that the stablecoin was crafted using an “exceptionally outdated” version of Solidity, a programming language predominantly associated with Ethereum, the globe’s second-largest blockchain. Specifically, PYUSD utilizes version 0.4.24, which not only proves costly for the end-user but also doesn’t align with contemporary industry standards.

The Power Dynamics of PYUSD

Further amplifying the centralization apprehensions are PayPal’s capabilities to suspend all transactions, immobilize addresses and funds, and even arbitrarily augment the stablecoin’s overall supply. Discussions on X have highlighted the potential misuse of this authority by PayPal, drawing parallels to instances where the company proposed a hefty $2500 penalty for users allegedly disseminating false information online.

However, it’s essential to note that such centralization issues aren’t exclusive to PYUSD. Established stablecoins like Tether USD (USDT) and USD Coin (USDC) have faced similar concerns in the past.

The Silver Lining: PYUSD’s Potential Impact on Crypto Adoption

Despite the centralization debates, a segment of the crypto community remains optimistic about PYUSD’s potential influence on the industry. Erik Voorhees, a renowned crypto influencer, posits that the concerns associated with PYUSD are also applicable to existing stablecoins.

Many enthusiasts believe that PYUSD’s association with PayPal, a platform boasting a staggering 430 million global users, could significantly accelerate cryptocurrency adoption. Some even suggest that PYUSD might serve as a gateway for crypto novices, eventually guiding them towards the expansive world of DeFi.

The post PayPal’s PYUSD Stablecoin: A Double-Edged Sword for the Crypto World? appeared first on Crypto Market Insights: Dive In with CryptoUpdate.io.