Extractable value of minors. This sentence is essentially one of the greatest fundamental risk areas that exist for blockchain -based systems. The original design of a blockchain Included incentives to minors (or other consensus participants deciding on the order of transactions) to earn income according to any initial blocking grant Each block has come into circulation in addition to the costs paid by users to confirm their transactions.
These two things are no longer the only sources of income that encourage the actions of minors. More complicated contracts and protocols now exist to facilitate the creation and exchange between different active workers hosted on a blockchain. These contracts, by design, allow open access to anyone. If you have an asset required and can fulfill the specified exchange conditions, any user can interact unilaterally with the contract or the protocol to exchange assets.
Since minors finally decide what transactions are accepted in blocks, this gives minors preferential access to “jump the line” by interacting with these contracts and protocols. This presents a serious problem, depending on the degree of complexity involved in the successful extraction of the value of different contracts or protocols.
This creates enormous centralization pressure on mining, the more these contracts and protocols are complicated. Minors have the ability To collect all this value, but to do this, they must really analyze the current state of these contracts. The more complex the contract, the more complex and costly the analysis, the more centralization pressure for minors.
It is horrible for resistance to censorship.
Separation of the manufacturer from the proponent
Ethereum is the child of Mev’s poster who went wrong. Due to the high complexity of contracts deployed on Ethereum, the quantity of MEV created on this channel was very important. Naturally, they found attempts at solutions in response to the problem.
The separation of the manufacturer of the proponent sought to alleviate the risks of centralization of MEV by creating a separation between the two roles involved in the movement of the blockchain. Manufacturers (creators of block models) manage the role of assembly really from transactions into blocks, and the proponents (minors / stakers) choose between the block models available to select the most profitable. The idea behind the proposal is that we can let centralization assign model producers, but save minors / stakers. As long as there is a competitive market for the production of models, things should always be secure.
In practice, this is not what happened. The reality is that only a few competitive manufacturers exist, and when the most profitable models decide to censor something, it is actually censored by each minor / male which chooses to use these models of profitable blocks. Since it is economically irrational not to choose the most profitable model, this does not really solve the risk of censorship.
Mevpool
THE Mevpool proposal By Matt Corallo and 7D5X9 is an attempt to modify the PBS proposal for Bitcoin in a way that really provides the attenuation of the risk of censorship.
The main difference between PBS and Mevpool is that the outsourcing of the construction of models is not total, in the Mevpool minors, it always ends up building the final block model themselves. They simply subcontract the process of selecting the subset of transactions which optimize the MEV extraction, including those of the block models which they build themselves. This aims to allow minors to maximize their reduction in MEV while retaining the freedom to include the transactions they wish, as opposed to the binary choice to accept censorship for maximum profit or to give up for profit to prevent censorship under PBS.
The proposal requires the implementation of market relays to host orders where MEV extractors can publish their proposed transactions and the costs they will pay to minors to include them in a block. They would allow the extractor to define the conditions under which he would pay the conclusion of the transaction, that is to say that if they are the first transaction to interact with a specific contract in the block. The markets would also support sealed or non-sealed orders, that is to say that sealed requests are orders where the proposed transaction is not really revealed to the minor until they extracted the block.
How does it work? Everything that needs minors is the hash of a transaction to include in the Merkle tree to start mining, they do not need the complete transaction until they find a valid block and to spread it. But they need to know that the transaction is valid. This is the role that market relays must fulfill.
There are two ways to do this. First, the simplest way is that they are a purely reliable third party. MEV extractors would submit their transactions to relay operators and minors would connect to these relays. Then, they would ask for the list of sealed and not sealed offers from the market operator, including the hacks necessary to include sealed offers, and ask personalized software to build the block model. Once they have found a valid blockage, they would send the block less the missing data in the relay.
The relay would then include the complete sealed transactions, would distribute the block themselves, then send to the minor the complete sealed transactions so that they can also diffuse the block. During this whole process, the costs of the MEV extractor would be held in full -time by the market relay and handed over to the minor after finding a valid block.
This requires putting a lot of confidence in the relay, both on the part of minors as well as MEV extractors paying them.
The second option is the use of an environment of confidence execution (TEE) to manage the construction of block models on the part of minors, as well as the handling of encrypted sealed offers. The minors would perform the personalized model software and a Bitcoin node inside the tee. After the minors received the sealed and not sealed offers and built their block, the TEE would sign a certificate of the block and provide Marketplace relay a session key.
The market would encrypt sealed transactions and a paying transaction to the minor its costs to the session key. After the minor found a valid blockhash achieving the difficulty of difficulty, the tee would decrypt sealed transactions and allow them to disseminate the complete block and collect their costs with MEV extractors. In this scenario, all those involved must trust the TEE to stay safe.
The end result
The end result of this is very likely in my opinion to be similar to PBS on Ethereum. There is only one handful of large manufacturers who build optimized MEV models for minors, and they all have transactions directly subject to the band from Mempool. The Mevpool Marketplace relays, the two variations, are reliable to publicly disseminate information on the costs of orders subject to them to allow normal users to estimate the appropriate costs. If large markets could attract non -sent transaction submissions elsewhere and refused this data on the costs, this could affect users in general.
In addition, although it allows minors the freedom to select their own transactions outside the MEV optimized subgroup, he always leaves room for large markets receiving private transactions to take advantage of this position. These markets could force minors to censor other transactions by holding their data from order book if no competitor existed with access to the same information.
In the end, I do not consider this as a solution to the question of MEV, plus a bandaid or an attenuation of the worst possible effects of it. It does not completely remove the centralization risks and pressures, but it improves them in certain areas.
This is an invited article by Shinobi. The opinions expressed are entirely theirs and do not necessarily reflect those of the BTC Inc or Bitcoin magazine.
