Why Aggregation Layers Centralize Power While Decentralizing Computation

Prover centralization is inevitable. The capital and expertise required to run a high-performance ZK-prover creates a natural oligopoly, mirroring the early days of Bitcoin mining pools. This centralizes the critical liveness function.

Sequencer power is the real bottleneck. While proving is outsourced, the entity ordering transactions (the sequencer) controls MEV extraction and censorship. This role, currently centralized in Arbitrum and zkSync, is the primary point of control.

Aggregation layers like Espresso attempt to decentralize sequencing, but they introduce a new meta-layer of validators. This shifts, rather than eliminates, the centralization problem to a different consensus mechanism.

The economic model reinforces this. Provers and sequencers capture fees and MEV, creating a winner-take-most market. This economic centralization precedes and enables governance capture in protocols like Optimism.

Aggregation centralizes sequencer power. A single sequencer, like Arbitrum's, bundles thousands of user transactions into a single batch for settlement on Ethereum. This creates a choke point for value extraction via MEV and fees, even as execution scales across thousands of nodes.

Decentralization becomes a commodity. The computational work of executing transactions is distributed, but this is the low-margin, replaceable layer. The high-value coordination layer—ordering and proving—remains a natural monopoly, akin to AWS in web2.

Protocols become client states. Rollups like Base or zkSync compete for users, but their economic sovereignty is leased from the underlying data availability layer, be it Celestia, EigenDA, or Ethereum. The aggregator that controls the cheapest, most reliable DA wins.

Evidence: Over 95% of rollup transaction volume flows through a handful of centralized sequencers today. The race for decentralized sequencer sets, like Espresso or Astria, is an admission that consolidation is the default state.

Aggregation centralizes economic power. Protocols like Across and UniswapX route user intents through a single, centralized solver network. This creates a winner-take-most market for liquidity and order flow, replicating the extractive economics of traditional finance within a decentralized facade.

Decentralized computation is a red herring. The security model shifts from validating state (like Ethereum L1) to trusting a small set of off-chain actors. The critical failure point is not the verifier but the centralized intent matching engine, which becomes a systemic risk.

Evidence from existing systems. LayerZero's Oracle/Relayer model demonstrates this centralization: a handful of approved entities control the cross-chain message pipeline. The governance capture risk is inherent, as seen in early DAO structures where token distribution failed to prevent oligopoly.

Aggregators centralize economic security. Protocols like EigenLayer pool staked ETH from restakers, creating a massive, shared security budget. This capital concentration makes the aggregator's validation logic and slashing mechanisms a single point of systemic risk for dozens of Actively Validated Services (AVSs).

They create operator oligopolies. To ensure performance, AVS operators are incentivized to run on centralized cloud providers (AWS, GCP). The economic efficiency of professional operators creates a winner-take-most market, where a handful of entities validate the majority of aggregated services, mirroring Lido's dominance in Ethereum staking.

Decentralization shifts to a meta-layer. The network's decentralization guarantee moves from thousands of individual node operators to the governance of the aggregation protocol itself. This trades distributed physical hardware for a cryptoeconomic trust model governed by a potentially small token-holder set.

Evidence: EigenLayer's top 5 node operators secure over 60% of its TVL, and AltLayer's restaked rollups rely on a permissioned set of operators selected by its Ecosystem Council. This demonstrates the inherent centralization in the operator layer that enables decentralized computation.