Why Is Ethereum Trying to Maximize Value From Users? Two Sides Debate - Ep. 388

Stephane Gosselin, cofounder and chief architect of Flashbots, and Uri Klarman, CEO of bloXrouteLabs, joined Unchained to discuss everything about MEV, an especially important topic now with the Merge coming. 
Show highlights:
what MEV is, how it works under Proof of Work
some examples of MEV, like frontrunning and arbitrage
how MEV is a rabbit hole full of monsters
the role of Flashbots in the MEV industry and how Flashbots enabled a reduction of gas fees for users
how MEV-geth functions and how it relates to auctions systems
how bloXroute, Uri’s company, is working with MEV
where Stephane and Uri disagree on MEV, despite agreeing on many fundamental things
how MEV changes with the implementation of Proof of Stake
what MEV-Boost is and the problems it solves
what proposer-builder separation is and the motivation behind this idea
whether DeFi would flourish more if there wasn’t frontrunning and why MEV-Boost doesn’t prevent it
what externalities MEV-Boost or proposer-builder separation (PBS) would solve for users
how MEV exists in other industries and in traditional finance
why Flashbots’ own investors would rather trade on a fair-sequenced rollup than on Flashbots
how the number of MEV extractors has been decreasing and whether this would end up centralizing MEV
whether exploiting certain types of MEV is illegal
how other chains are trying to solve frontrunning, like Osmosis with threshold encryption
what are the levers that can be pulled to solve MEV, according to Uri
how eradicating MEV can positively affect the price of ETH, and by how much
whether validators can potentially share MEV profits with users
how to determine if a network has a good MEV supply chain
Thank you to our sponsors!  
Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021
Ava Labs: https://www.avax.network/
a16z: https://link.chtbl.com/HObAJQDL?sid=unchained
 
Show Links  
Uri:  Twitter: https://twitter.com/uriklarman

 
Stephane:  Twitter: https://twitter.com/thegostep

 
Previous coverage of MEV on Unchained: The Debate Over Ethereum MEV: Should It Be Minimized or Boosted?: https://laurashin.bulletin.com/the-debate-over-ethereum-mev-should-it-be-minimized-or-boosted

The Other Side(s) of Ethereum's MEV Argument: https://laurashin.bulletin.com/the-other-side-s-of-ethereum-s-mev-argument

MEV What is MEV: https://ethereum.org/en/developers/docs/mev/#:~:text=Maximal%20extractable%20value%20(MEV)%20refers,of%20transactions%20in%20a%20block

Proposer-Builder separation: https://www.alchemy.com/overviews/proposer-builder-separation

Uri’s blog post: https://medium.com/@uri_61495/flipping-the-table-on-the-mev-game-dc31df8baaf7

MEV Profit sharing validators: https://www.recvc.com/mev-2-0-the-rise-of-mpsvs/

Panel conversation mentioned in the episode (39:53): https://youtu.be/UKfBFV1TuEM?t=2393

Sealed auction design: https://ethresear.ch/t/mev-sgx-a-sealed-bid-mev-auction-design/9677 
Priority Gas Auction (PGA): https://www.mev.wiki/terms-and-concepts/priority-gas-auctions#:~:text=What%20is%20a%20priority%20gas,up%20fees%20for%20other%20users.
Dune’s dashboard - amount of MEV extractors: https://dune.com/queries/1171509 
The MEV Game of the Crypto Economy: Osmosis' Threshold Encryption vs. SGX of Flashbot?: https://mirror.xyz/infinet.eth/SFjR1H1-RMnKoIoPjqkxpauVPrLYGqLHQP1dY9FHvx4

Bank of International Settlements report on MEV: https://www.bis.org/publ/bisbull58.pdf

 
Flashbots Flash Boys 2.0 paper: https://arxiv.org/pdf/1904.05234.pdf

Flashbots Dashboard: https://dashboard.flashbots.net/

Flashbots auctions: https://docs.flashbots.net/flashbots-auction/overview

Flashbots relay open source: https://twitter.com/hasufl/status/1559908331145265156?s=20&t=gtHe5sVetxQXVKfZL2VMYg

MEV Boost: https://www.alchemy.com/overviews/mev-boost

MEV in ETH PoS: https://writings.flashbots.net/writings/mev-boost-call-for-testing

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Stephane Gosselin, cofounder and chief architect of Flashbots, and Uri Klarman, CEO of bloXrouteLabs, joined Unchained to discuss everything about MEV, an especially important topic now with the Merge coming. 

Show highlights:

what MEV is, how it works under Proof of Work some examples of MEV, like frontrunning and arbitrage how MEV is a rabbit hole full of monsters the role of Flashbots in the MEV industry and how Flashbots enabled a reduction of gas fees for users how MEV-geth functions and how it relates to auctions systems how bloXroute, Uri’s company, is working with MEV where Stephane and Uri disagree on MEV, despite agreeing on many fundamental things how MEV changes with the implementation of Proof of Stake what MEV-Boost is and the problems it solves what proposer-builder separation is and the motivation behind this idea whether DeFi would flourish more if there wasn’t frontrunning and why MEV-Boost doesn’t prevent it what externalities MEV-Boost or proposer-builder separation (PBS) would solve for users how MEV exists in other industries and in traditional finance why Flashbots’ own investors would rather trade on a fair-sequenced rollup than on Flashbots how the number of MEV extractors has been decreasing and whether this would end up centralizing MEV whether exploiting certain types of MEV is illegal how other chains are trying to solve frontrunning, like Osmosis with threshold encryption what are the levers that can be pulled to solve MEV, according to Uri how eradicating MEV can positively affect the price of ETH, and by how much whether validators can potentially share MEV profits with users how to determine if a network has a good MEV supply chain Thank you to our sponsors!

 

Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021

Ava Labs: https://www.avax.network/

a16z: https://link.chtbl.com/HObAJQDL?sid=unchained

 

Show Links

 

Uri:  Twitter: https://twitter.com/uriklarman

 

Stephane:  Twitter: https://twitter.com/thegostep

 

Previous coverage of MEV on Unchained: The Debate Over Ethereum MEV: Should It Be Minimized or Boosted?: https://laurashin.bulletin.com/the-debate-over-ethereum-mev-should-it-be-minimized-or-boosted
The Other Side(s) of Ethereum's MEV Argument: https://laurashin.bulletin.com/the-other-side-s-of-ethereum-s-mev-argument

MEV What is MEV: https://ethereum.org/en/developers/docs/mev/#:~:text=Maximal%20extractable%20value%20(MEV)%20refers,of%20transactions%20in%20a%20block
Proposer-Builder separation: https://www.alchemy.com/overviews/proposer-builder-separation
Uri’s blog post: https://medium.com/@uri_61495/flipping-the-table-on-the-mev-game-dc31df8baaf7
MEV Profit sharing validators: https://www.recvc.com/mev-2-0-the-rise-of-mpsvs/
Panel conversation mentioned in the episode (39:53): https://youtu.be/UKfBFV1TuEM?t=2393
Sealed auction design: https://ethresear.ch/t/mev-sgx-a-sealed-bid-mev-auction-design/9677  Priority Gas Auction (PGA): https://www.mev.wiki/terms-and-concepts/priority-gas-auctions#:~:text=What%20is%20a%20priority%20gas,up%20fees%20for%20other%20users. Dune’s dashboard - amount of MEV extractors: https://dune.com/queries/1171509  The MEV Game of the Crypto Economy: Osmosis' Threshold Encryption vs. SGX of Flashbot?: https://mirror.xyz/infinet.eth/SFjR1H1-RMnKoIoPjqkxpauVPrLYGqLHQP1dY9FHvx4
Bank of International Settlements report on MEV: https://www.bis.org/publ/bisbull58.pdf

 

Flashbots Flash Boys 2.0 paper: https://arxiv.org/pdf/1904.05234.pdf
Flashbots Dashboard: https://dashboard.flashbots.net/
Flashbots auctions: https://docs.flashbots.net/flashbots-auction/overview
Flashbots relay open source: https://twitter.com/hasufl/status/1559908331145265156?s=20&t=gtHe5sVetxQXVKfZL2VMYg
MEV Boost: https://www.alchemy.com/overviews/mev-boost
MEV in ETH PoS: https://writings.flashbots.net/writings/mev-boost-call-for-testing

Learn more about your ad choices. Visit megaphone.fm/adchoices