Learn more about Flashbots organization details, research routes and start-up projects.
Extended reading: ” Ethereum Dark Forest is accelerating the spread, how can Flashbots alleviate the “miners can extract value” crisis? 》
Original title: “Introduction | Flashbots: Race Against the MEV Crisis”
Written by: thegostep
Translation: Ajian
Flashbots is a research and development organization. The original intention of its establishment was to alleviate the negative externalities and survival risks brought by the “miner-extractable value (MEV)” to the smart contract platform blockchain. We propose to design a trust-free, transparent and fair ecosystem for MEV collection to protect the concept of Ethereum.
The skyrocketing usage of Ethereum in the past few months has exposed some of the negative externalities brought about by MEV, including network congestion (that is, the increased burden on peer-to-peer networks) and chain congestion (that is, the tight block space): our preliminary Evaluation shows that by eliminating the inefficient MEV extraction process, the throughput of Ethereum can be increased by at least 2.4%. In addition, the current incentive system of MEV extraction method brings survival risk to the consensus security of Ethereum, because it gives people an incentive to initiate chain reorganization in order to obtain MEV of past blocks (for example, through time-bandit attack 14 ), it also gives people an incentive to centralize the routing of transactions for the benefits of privacy, low latency, and ranking control. We think these incentives are harmful because they will undermine the accessibility and finality of Ethereum.
Although these survival risks and negative externalities have always existed, a series of events in the past six months have shown that network usage has reached a critical point. We have observed that many people have been actively developing exclusive transaction routing facilities, and they are also very worried about all this because it may erode the neutrality, transparency, decentralization and fairness of Ethereum today. These events also show that the aforementioned existential crisis and negative externalities have a growing trend.
In this article, we will explain the details of the Flashbots organization and the starting projects of our research roadmap, MEV-Inspect and MEV-Geth. For the background and motivation of our project, further discussion can be found in this article.
MEV-Inspect: Eliminate information asymmetry
The first step in understanding the problems posed by current MEV collection methods is to quantify their impact. Previously, there were also some web pages, such as frontrun.me 27, and some industry indicator websites, which included MEV-related indicators, but we found that a standardized and scalable method was needed to take advantage of this generated by Ethereum and other blockchains. Class data.
How MEV-Inspect works
MEV-Inspect is a blockchain crawler that scans the Ethereum blockchain and recognizes MEV extraction activities.
The crawler traverses the blockchain, analyzes transactions one by one, checks the known operations that occurred in a transaction, and infers from these combined behaviors what may have happened in a transaction. After the classification is clear, the statistical data will be marked with important tags (supplier, transaction type, success or failure), and put into the database for tabulation and analysis.
The preliminary analysis obtained from MEV-Inspect showed the following scenarios:
- Of the 443,000 blocks analyzed, at least 10,000 blocks were wasted in the inefficient MEV extraction process
- On average, bots have drawn at least 0.34 ETH of MEV through arbitrage and liquidation in each block
- At least 18.7% of the MEV obtained by the robot is turned into a gas fee and handed over to the miner. This part of the procedure accounts for 3.7% of all transaction fees
Why develop MEV-Inspect?
Without work like MEV-Inspect to help us understand MEV better, it would be even harder for Ethereum users to understand MEV. As more and more security-critical infrastructures are migrated off-chain, as well as the growth of on-chain state and data scale, it is increasingly difficult for ordinary people to obtain one of the initial vision of cryptocurrency: transparency. Maintaining a transparent dashboard for users is the best way for us to objectively evaluate the current status of MEV and test the impact of Flashbots activities. Therefore, we promise to maintain such a dashboard as long as funds and resources of our organization permit.
Increase coverage
It is not easy to understand MEV activities on the chain through MEV-Inspect. It needs to do its utmost to analyze the behavior of various robots and develop heuristic methods to classify the robot’s use of smart contracts. These classifications may never be perfect, but our goal is to provide useful assessments and track the evolution of indicator values. The modular architecture of MEV-Inspect is designed to allow the community to participate. With the contribution of the community, we can continuously improve the coverage and accuracy of the tool. See MEV-Inspect’s Github repository.
MEV-Geth: Proof of Concept
We have designed and implemented a proof-of-concept project for the license-free MEV extraction method called “MEV-Geth”. In general, it is a sealed-bid auction mechanism for communicating transaction ranking preferences. Although our proof of concept project is incomplete trust guarantees in the trust model, we believe it is a major improvement to the status quo. The use of MEV-Geth should greatly alleviate network congestion and chain congestion caused by frontrunning and backrunning robots.
Why develop MEV-Geth?
We believe that if a neutral, open, and open source infrastructure is not adopted to achieve access-free MEV extraction, MEV may become an insider’s house. As an organization, we promise to provide a reference implementation of a fair, ethical, and politically neutral MEV extraction method. We also hope to prevent Ethereum from being eroded by trust-based dark pools or specialized channels by doing so. These are weaknesses in security. We launched MEV-Geth with dual goals. On the one hand, we hope to create an ecosystem that can protect the characteristics of Ethereum for the extraction of MEV. On the other hand, the system can start a dialogue with the community around our research and development roadmap.
Design goals
Access-free : no intermediary who can review transactions
Efficient : The MEV extraction process will not cause unnecessary network congestion and chain congestion
Privacy before chaining : that is, the transaction will only become known to everyone when it is packaged into the block. Note that this privacy does not exclude participants such as transaction aggregators/gateways/miners who have the priority to know.
Privacy of unsuccessful bidding transactions : This means that unsuccessful bidding transactions will never be exposed (and will never be chained). This is closely related to the “efficiency” attribute.
Complete privacy : No one can know before the transaction is on the chain, including transaction aggregators/gateways/miners.
Finality : Once the transaction is packaged on the chain, the withdrawal of MEV is irreversible. Used to prevent time-bandit chain reorganization attacks.
MEV-Geth’s proof of concept is based on the fact that searchers can reject offers from specific miners to deter malicious behavior (such as profit-stealing strategies). We expect that complete privacy requires some privacy computing solutions, such as SGX, ZKP, and MPC, to ensure that the content of the transaction is kept secret from the miners before being put on the chain. A core goal of the Flashbots organization is to stimulate and produce research in this direction.
MEV-Geth cannot provide any guarantee of finality. We believe that the solution to this problem requires the privacy of the chain state itself to achieve privacy after transaction execution, or rollback is even less economically feasible. Designing a system with robust finality is the second major goal of MEV-Geth research.
How does MEV-Geth work?
MEV-Geth introduces some new concepts: “searchers”, “transaction packages” and “block templates”. In essence, MEV-Geth provides a way for miners to outsource the task of finding and sorting transactions to a third party (ie, “searchers”). These searchers will compete with each other to find the most profitable transaction sequence, and use a standardized template called “transaction package” to bid, so that their transaction package will be packaged into the next block. These transaction packages will be evaluated in the dark bid auction hosted by the miners, and a “block template” will be generated. The template contains the transaction ranking information required to mine the block.
MEV-Geth is compatible with all official Ethereum clients. The core developers of Flashbots are maintaining a reference implementation for the go-ethereum client.
As a searcher, how to use
The job of the searcher is to monitor the state of Ethereum and the transaction pool to discover MEV opportunities, and then produce transaction packages to extract these MEVs. Anyone can be a searcher. In fact, some extraction is not a necessary condition for the production of transaction packages, but we expect that some of the most valuable transaction packages will be extracted. A MEV-Geth transaction package is a piece of standardized information, consisting of an array of valid transactions, a block height, and an optional timestamp range (defining the valid time of the transaction package).
{
"signedTransactions": ['...'], // RLP encoded signed transaction array
"blocknumber": "0x386526", // hex string
"minTimestamp": 12345, // optional uint64
"maxTimestamp": 12345 // optional uint64
}
signedTransactions can be any valid signedTransactions transaction. Note that the nonce of the transaction must be placed in the correct order.
blocknumber defines the block height that the transaction package is expected to be chained. The transaction package will only be valued at a suitable height, and if it is not selected, it will be immediately discarded.
minTimestamp and maxTimestamp are two optional conditions to further limit the valid time range of the transaction package.
MEV-Geth miners select the most profitable transaction package for each unit of gas they use, and place the transaction package at the beginning of the transaction list of the block template with a given block height. The miner determines the value of a transaction package according to the following formula. Note that the amount of change in the balance of block.coinbase means the amount of ETH directly transferred through a smart contract.
When submitting the transaction package, the searcher can use the eth_sendBundle method to directly send the transaction package to the miner. Because MEV-Geth requires direct communication between searchers and miners, searchers need to be able to configure a list of target miners.
As a miner, how to use
Miners only need to run MEV-Geth to mine MEV blocks, or they can implement their own forked version that meets the specifications.
In order to receive transaction packages from searchers, miners need to publish a public https port to expose their eth_senBundle RPC interface.
MEV-Geth is maintained by the Flashbots core developer team, and the source code can be found here.
Beyond proof of concept
MEV-Geth is just the first milestone on our road. We hope to discuss with the community the advantages of adopting MEV-Geth now. Our preliminary research shows that by eliminating runaway transactions and trailing transactions, blockchain congestion can be reduced by at least 2.4%, and mining revenue can be significantly improved. In addition, we believe that a sustainable solution to the MEV survival crisis requires complete privacy and finality, which is not available in our proof of concept project. We hope that MEV-Geth can get feedback from the community on its way to a complete version.
Flashbots: our organization
Flashbots originated from MEV Pi-rate Ship, a neutral and unbiased interdisciplinary research group that supports MEV-related theoretical and empirical research.
Research and development are two closely integrated engines that promote the phased development of Flashbots:
- Our research work will be maintained for a long time. We will use research to determine and upgrade our roadmap, define the various stages of organizational development and related milestones;
- The development work aims at milestones. We will organize a product-centric team to provide key infrastructure and ecological tools while collecting data and making other tools that can feed back research.
Our research requires open, transparent and iterative collective creation. We must draw inspiration from academic research and applied research, and we will also use the Ethereum Upgrade Proposal (EIP) process as a template. Research can get financial support from the MEV Researcher Project.
Public commitment
As an open research organization, we promise that, from now on, we will:
- Use our creations to protect the core values of Ethereum: openness, access-free, decentralization, and meet the crisis caused by MEV;
- Open source our research and Flashbots core infrastructure code, so that everyone in the community can participate and benefit from it;
- By considering the needs of users, miners, developers, node operators, public infrastructure operators and developers, contract/application developers, and ecosystem researchers, a sustainable system is established among the key participants of the entire ecosystem. joint;
- Contribute to open ethical research issues in the MEV field and deliver 100% to the public domain.
Research objectives
Our big goal-to resolve the MEV crisis-can be broken down into three parts: revealing the secrets, democratization and distribution. For each part, we list the questions we are trying to answer:
Demystifying the dark forest
- How can we objectively measure the negative externalities brought about by the MEV extraction process and the impact of Flashbots technology?
- How to quantify the harm that users have suffered due to the MEV extraction method and provide developers with tools to reduce the impact of applications?
- How to introduce more transparency into the MEV field so that the community can formulate social norms for the extraction of MEV?
Democratized extraction process
- How can we avoid market mechanisms that lead to concentration of power?
- How can the MEV extraction process be efficient without barriers to entry?
- How can MEV opportunities be opened to everyone equally?
profit distribution
- How can we establish a sustainable incentive compatibility model among miners, traders, DeFi developers, etc.?
- How to divert part of the profits to the production of public goods (such as the development of the Ethereum client) to form a virtuous circle?
- How to minimize the negative externalities and maximize the positive externalities extracted by MEV?
Research roadmap-Phase I
We split the research roadmap into different stages, so that follow-up research builds on the previous successes and conclusions. Phase I includes two studies:
Paper 1: Flashbots architecture
Summary: Describe the architecture and design trade-offs of the infrastructure we are developing
When searchers and miners communicate their transaction ranking preferences, what kind of auction mechanism is a “good” mechanism?
Is there a formal mathematical definition of such a “good” mechanism? How to use existing auction theory literature to create transaction pool auction theory?
Will these mechanisms perform differently in PoW/PoS/no-leader algorithms and rollup contracts with transaction ordering auctions?
Paper 2: Flashbots Ethics
Abstract: Discuss the ethical issues related to MEV and the infrastructure we have developed
Should we develop a “good” auction mechanism to communicate transaction ranking preferences?
How to minimize the harm to consensus and users caused by bribery incentives for priority competition?
Should MEV be allowed in the system? Should MEV be restricted? What kind of social norms are needed?
What level of transparency should be allowed in MEV extraction?
How is MEV defined in judicial terms? What kind of industry self-discipline should be formed?
Solicit feedback and contributions
Contribute to MEV-Research
We welcome you to visit our MEV-Research Github library to learn about the MEV Fellowship project. You can start contributing by raising an issue and/or writing a Flashbots Research Proposal (FRP), or join our discussion on the MEV-Research discord channel.
Try our proof of concept
If you are a miner or a mining pool, you are welcome to review our code and try MEV-Geth. If you are a DeFi trader with a robot running, you are also welcome to test Flashbots and try to act as a searcher. Join our Flashbots discord channel, or contact us at info@flashbots.net .
Subscribe to MEV Ship Calendar
You can get our latest updates and events by subscribing to MEV Ship Calendar: we will have a regular community meeting called “MEV Ship Treasure Map Roast” approximately once a month; there will be a core developer meeting approximately every two weeks; There will be a seminar and an upcoming informal meeting: MEV.wtf
Flashbots are currently managed by Scott Bigelow, Phil Daian, Stephane Gosselin, Alex Obadia, and Tina Zhen. Thanks to MEV Pi-Rate Ship members and Paradigm for their support, we can exist.
Heartfelt thanks to Andrei Anisimov, Ivan Bogatyy, Vaibhav Chellani, Brock Elmore, Georgios Konstantopoulos, Jason Paryani, Alejo Salles, samczsun, and Austin Williams for their contributions to MEV-Geth and MEV-Inspect, as well as Sunny Aggarwal, Surya Castguashiy, Surya Castguashiy, Phillips Chitra, Dan Elitzer, Lev Livnev, Charlie Noyes, Dev Ojha, Dan Robinson, Mark Tyneway, and Micah Zoltu’s feedback on MEV-Research.
Source link: ethresear.ch
