Why EIP-4844 Exposes Centralization Risks in Sequencing

EIP-4844's ~0.375 MB per block target is a shared, competitive resource. During high-demand periods (e.g., NFT mints, airdrops), L2s will bid for limited blob space.

• Creates a fee market for data availability, shifting cost pressure but not eliminating it.
• Advantages large, well-capitalized sequencers (e.g., Arbitrum, Optimism) who can afford to outbid smaller rollups.
• Risks creating a two-tier system where only the biggest players guarantee timely inclusion.

To minimize latency and costs, sequencers will run sophisticated blob propagation networks. This is infrastructure few can build.

• Centralizes around entities with global node networks (e.g., Blockdaemon, Bloxroute).
• Creates a reliance on centralized relayers, mirroring the MEV relay problem.
• Small rollups become clients of these services, inheriting their liveness assumptions and potential censorship.

PBS (Proposer-Builder Separation) is incomplete. Builders who also operate major sequencers (e.g., Flashbots SUAVE, Jito) gain asymmetric advantages.

• Can internalize blob ordering and MEV, creating vertically integrated blocks.
• Validators are incentivized to choose these high-value blocks, further entrenching the builder's market share.
• This centralizes the source of canonical L2 state at the builder level.

Sequencer revenue, now partially derived from managing blob economics, becomes a key governance token utility. This attracts extractive actors.

• Tokens like ARB, OP are voted to maximize sequencer profit, not user experience.
• Creates perverse incentives to limit decentralized sequencing or favor affiliated builders.
• Transforms L2s from tech stacks into financialized, centralized service providers.

While blob data is cheap, its temporary 18-day window creates a critical dependency. Sequencers must reliably propagate this data to the consensus layer within the ~6-minute timeout or face transaction failures. This creates a single point of failure and a natural moat for incumbent sequencers like Arbitrum and Optimism who control this critical path.

• Centralization Risk: Small, independent sequencers can't guarantee blob propagation, leading to market consolidation.
• MEV Implications: Failed blobs mean lost transactions, creating a new MEV extraction vector for dominant players.

The technical complexity of managing blob lifecycle, DA bridging, and L1 settlement post-EIP-4844 will push rollup teams towards managed sequencer services from providers like Caldera, Conduit, and AltLayer. This outsources centralization but creates vendor lock-in and protocol-level risk concentration.

• Builder Action: Architect for sequencer decentralization from day one using frameworks like Espresso or Astria.
• Investor Lens: Value protocols with a credible path to decentralized sequencing higher than those reliant on a single SaaS provider.

EIP-4844 makes the case for PBS in rollups undeniable. Bundling block building, blob publishing, and transaction ordering in one entity is now a systemic risk. The future is specialized roles: Builders craft blocks, Proposers select them, and a separate network (e.g., EigenLayer operators) handles DA attestation.

• Solution Path: Adopt a PBS design similar to Ethereum, decoupling trust assumptions.
• Competitive Edge: Rollups that implement PBS first will attract more sophisticated capital and dApps requiring credible neutrality.

The canonical bridge, the most critical security contract, is often controlled by a multi-sig managed by the core rollup team. EIP-4844 doesn't change this, but the increased value and complexity flowing across it heightens the risk. A sequencer compromise could be amplified by bridge control.

• Investor Due Diligence: Scrutinize bridge upgradeability and governance. Immutable bridges or those with slow, decentralized timelocks are superior.
• Builder Mandate: Design for sovereign upgrade paths or leverage shared security layers like EigenLayer for bridge validation.