Exploring Correlation Patterns in the Ethereum Validator Network

TL;DR

This paper introduces a new correlation-based index to measure Ethereum validator network decentralization, capturing potential collusion and coercion factors overlooked by existing indices.

Contribution

It proposes a novel correlation-based index for assessing decentralization in Ethereum, providing a more nuanced understanding of entity dominance and potential collusion.

Findings

The new index captures correlation patterns among entities.

It offers a more nuanced measure of decentralization.

Potential to identify coercion or collusion in the network.

Abstract

There have been several studies into measuring the level of decentralization in Ethereum through applying various indices to indicate the relative dominance of entities in different domains in the ecosystem. However, these indices do not capture any correlation between those different entities, that could potentially make them the subject of external coercion, or covert collusion. We propose an index that measures the relative dominance of entities based on the application of correlation factors. We posit that this approach produces a more nuanced and accurate index of decentralization.