Ethereum's 2025 Upgrades to Tackle MEV and Censorship, Rivaling Cardano's Midnight Sidechain

Ethereum is preparing to deploy two major network upgrades in 2025 and 2026 that promise to enhance scalability, decentralization, and transaction privacy. The Glamsterdam and Hegota hard forks will introduce Proposer-Builder Separation (ePBS) and Fork-Choice-Enforced Inclusion Lists (FOCIL), positioning the network to address persistent concerns around validator centralization and transaction censorship.

Glamsterdam Upgrade: Tackling MEV Through ePBS

The first upgrade, Glamsterdam, is scheduled for deployment in the first half of 2025. It will introduce ePBS, a mechanism designed to further separate the roles of block builders and validators on the Ethereum network. This architectural change directly addresses the problem of Maximal Extractable Value (MEV), where large validators exploit their position to profit from transaction ordering.

MEV has become a significant issue for Ethereum users. In early 2025, the network saw MEV extraction reach approximately $24 million in a single month. While validators benefit financially from practices like front-running and sandwich attacks, these revenue-driven strategies have contributed to increased network congestion and higher gas fees for ordinary users.

By distributing validator power more evenly, ePBS aims to mitigate the centralization risks typically associated with large validators dominating MEV opportunities. This should create a more level playing field and improve the overall user experience on the network.

Hegota Upgrade: Preventing Transaction Censorship

The second major upgrade, Hegota, is planned for the second half of 2026 and will implement FOCIL (EIP-7805). This mechanism will require 16 randomly selected validators to include specific transactions in their blocks, effectively preventing validators from blocking or censoring transactions based on profitability considerations.

The Ethereum development community is also exploring a more expansive version called "Big FOCIL," which would provide the same anti-censorship benefits at a significantly larger scale, further strengthening network resilience against transaction exclusion.

Cardano's Competing Vision

Cardano is pursuing similar goals through a different approach with its upcoming Midnight sidechain. This privacy-focused solution will employ a dual tokenomics system that enables users to shield sensitive information, including account balances and transaction histories.

The Midnight sidechain will separate private and public computations, which should reduce congestion on the main Cardano network and lower gas fees. Notably, Midnight is being designed with regulatory compliance in mind, potentially making it attractive to privacy-conscious institutional users operating in regulated environments.

Market Performance Following Recent Rally

Both networks have seen positive price action amid a broader market recovery. ETH, the second-largest cryptocurrency by market capitalization, was trading at $2,042, representing a 6% increase over the previous 24 hours. ADA, ranked 10th by market cap, reached $0.68, gaining 2.70% during the same period.

Cardano has experienced additional positive market sentiment following the recent launch of USDCx, a stablecoin backed by USDC on the Cardano network.

However, both altcoins continue to demonstrate strong correlation with Bitcoin's price movements. Industry analysts suggest that sustained upward momentum for ETH and ADA will largely depend on whether BTC can break through the $70,000 resistance level.

Coinasity's Take

Ethereum's planned upgrades represent a significant technical evolution that directly addresses two of blockchain's most challenging problems: validator centralization and transaction censorship. While Cardano's Midnight sidechain takes a different architectural approach, both networks are clearly prioritizing privacy and decentralization in response to user demands and competitive pressures. The timing of these upgrades could prove crucial as regulatory scrutiny of blockchain privacy features intensifies globally. Investors should monitor implementation timelines closely, as successful deployment could materially impact network adoption and token valuations.