Flashbots: Race against the MEV crisis

特邀专栏作者

2020-12-20 06:51

This article is about 5891 words, reading the full article takes about 9 minutes

Flashbots is a research and development organization that was originally established to alleviate the negative externalities and survival risks brought by the "miner extractable value" to the smart contract platform blockchain.

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Editor's Note: This article comes fromEthereum enthusiasts (ID: ethfans)Editor's Note: This article comes from

Ethereum enthusiasts (ID: ethfans)

, author: thegostep, translation: A Jian, reprinted by Odaily with authorization.

Flashbots is a research and development organization founded to alleviate the negative externalities and survival risks brought about by "miner-extractable value (MEV)" to smart contract platform blockchains. We propose to design a trustless, transparent and fair ecosystem for the collection of MEV to defend the concept of Ethereum.

The explosion of Ethereum usage over the past few months has exposed some of the negative externalities posed by MEV, including network congestion (i.e., increased burden on the peer-to-peer network) and chain congestion (i.e., tight block space): our preliminary The evaluation shows that Ethereum’s throughput can be increased by at least 2.4% by eliminating the inefficient MEV pumping process. Furthermore, the current incentive system for MEV pumping poses an existential risk to consensus security in Ethereum, as it creates incentives to initiate chain reorgs in order to obtain MEV for past blocks (e.g., via time-bandit attack 14 ), also gives people an incentive to centralize the routing of transactions for the benefits of privacy, low latency, and ordering control. We believe these incentives are harmful because they undermine Ethereum’s admission-free and finality.

While these existential risks and negative externalities have always existed, a series of events over the past six months have shown that the usage of the network has reached a tipping point. We have observed that many people are actively developing exclusive transaction routing facilities, and are worried about all this, because it has the potential to erode the neutrality, transparency, decentralization and fairness of Ethereum today. These events also show that the aforementioned existential crisis and negative externalities tend to intensify.

In this article, we explain the details of the Flashbots organization and the starter projects of our research roadmap, MEV-Inspect and MEV-Geth. Further discussion on the background and motivation of our project can be found here.

MEV-Inspect: Eliminating Information Asymmetry

The first step in understanding the problems posed by current means of MEV collection is to quantify their impact. Previously there were pages, such as frontrun.me27, and some industry metrics sites, that included MEV-related metrics, but we found that there needed to be a standardized and scalable way to leverage this data produced by Ethereum and other blockchains. class data.

How MEV-Inspect works

MEV-Inspect is a blockchain crawler that scans the Ethereum blockchain and identifies MEV pumping activity.
The crawler traverses the blockchain, analyzing transaction by transaction, examining known actions that occurred within a transaction, and deducing from these combined actions what might have occurred in a transaction. Once categorized, statistical data is tagged with important tags (supplier, transaction type, success or failure) and put into a database for tabulation and analysis.
Preliminary analysis obtained from MEV-Inspect revealed the following:

Of the 443,000 blocks analyzed, at least 10,000 were wasted in inefficient MEV extraction

On average, bots raked in at least 0.34 ETH of MEV per block through arbitrage and liquidations

At least 18.7% of the MEV obtained by the robot has been turned into gas fee and handed over to the miners, which accounts for 3.7% of all transaction fees

Why develop MEV-Inspect?

Without work like MEV-Inspect to help us better understand MEV, it would be even harder for Ethereum users to understand MEV. As more and more security-critical infrastructure moves off-chain, and on-chain state and data grow in size, it becomes increasingly difficult for ordinary people to gain access to one of the original visions of cryptocurrencies: transparency. Maintaining a transparent dashboard for our users is the best way we can objectively assess the current state of MEV and examine the impact of Flashbots activity. Therefore, we are committed to maintaining such a dashboard for as long as funding and our organization's resources allow.

increase coverage

It is not easy to understand the MEV activities on the chain through MEV-Inspect. It requires a best effort to analyze the behavior of a wide variety of bots and develop heuristics to classify bots' use of smart contracts. These classifications may never be perfect, but our goal is to provide useful assessments and track the evolution of metric values. The modular architecture of MEV-Inspect is designed precisely to allow community participation, with which we can continuously improve the coverage and accuracy of the tool. See the Github repository for MEV-Inspect.

We have designed and implemented a proof-of-concept project for a permission-free MEV extraction method called "MEV-Geth". In general, it is a sealed-bid auction mechanism for communicating transaction ordering preferences. While our proof-of-concept project is incomplete trust guarantees, we believe it is a significant improvement over the status quo. Adoption of MEV-Geth should greatly alleviate network congestion and chain congestion caused by frontrunning and backrunning bots.

Design goals

Why develop MEV-Geth?
We believe that if a neutral, open, and open-source infrastructure is not used to achieve access-free MEV extraction, MEV may become an insider's house. As an organization, we are committed to providing a reference implementation of a fair, ethical, and politically neutral MEV extraction method. We also hope that by doing this, we can prevent Ethereum from being eroded by trust-based dark pools or dedicated channels, which are weak points in security. We launched MEV-Geth with a dual goal. On the one hand, we hope to create an ecosystem for the extraction of MEV that can protect the characteristics of Ethereum. 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 capable of vetting transactions
Efficient: The extraction process of MEV will not cause unnecessary network congestion and chain congestion
Privacy before going to the chain: that is, the transaction will only become known to everyone when it is packaged into the block. Note that this privacy does not preclude prior informed actors such as transaction aggregators/gateways/miners.

Bid failure transaction privacy: It means that the transaction that fails the bid will never be exposed (and will never be uploaded to the chain). This is closely related to the "efficiency" property.

Complete privacy: no one, including transaction aggregators/gateways/miners, can know before the transaction is on-chain.

Finality: Once the transaction is packaged on the chain, the extraction of MEV is irreversible. Used to prevent time-bandit chain reorganization attacks.

The proof-of-concept of MEV-Geth is based on the fact that searchers can reject offers from specific miners, thereby deterring malicious behavior (such as stealing profit strategies). We expect complete privacy to require some privacy computing solutions, such as SGX, ZKP, and MPC, to ensure that the content of transactions is kept secret from miners before being uploaded to the chain. A core goal of the Flashbots organization is to stimulate and produce research in this direction.

MEV-Geth cannot provide finality guarantees in any sense. We believe that the solution to this problem requires either post-execution privacy through the privacy of the chain state itself, or rollbacks are less economically viable. Designing systems 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 bundles", and "block templates". Essentially, MEV-Geth provides a way for miners to outsource the task of discovering and ordering transactions to third parties (aka "hunters"). These searchers will compete with each other to find the transaction sequence that maximizes profit, and use a standardized template called "transaction package" to bid for their transaction package to be included in the next block. These transaction packages will be valued in a dark bid auction hosted by miners, and a "block template" will be generated, which contains the transaction ordering information required to dig out 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 scouts is to monitor the state of Ethereum and transaction pools to discover MEV opportunities, and then produce transaction packets to pump these MEVs. Anyone can be a searcher. In reality, some decimation is not a requirement for producing trade bundles, but we expect that some of the most valuable trade bundles will be siphoned. A MEV-Geth transaction packet is a standardized piece of information consisting of an array of valid transactions, a block height, and an optional timestamp range (defining when the transaction packet is valid).

signedTransactions can be any valid Ethereum transaction. Note that the transaction's nonces must be placed in the correct order.

blocknumber defines the block height of the transaction package that is expected to be uploaded to the chain. The transaction package will only be evaluated at the appropriate height, and will be discarded immediately if it is not selected.

minTimestamp and maxTimestamp are two optional conditions, which are used to further limit the valid time range of the transaction package.

MEV-Geth miners will select the most profitable transaction package for each unit of gas they use, and put this transaction package at the beginning of the transaction list of the block template at a given block height. Miners determine the value of a transaction package according to the following formula. Note that the balance change of block.coinbase represents the amount of ETH transferred directly through a smart contract.

When submitting the transaction bundle, the searcher can use the eth_sendBundle method to directly send the transaction bundle to the miners. Because MEV-Geth requires direct communication between the searcher and miners, the searcher needs to be able to configure a list of target miners.

As a miner, how to use

Miners can simply run MEV-Geth to mine MEV blocks, or implement their own spec-compliant fork.

To receive transaction bundles from seekers, 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 way. We hope to discuss with the community the advantages of adopting MEV-Geth now. Our preliminary research shows that by eliminating front-running and trailing transactions, blockchain congestion can be alleviated by at least 2.4% and mining yields can be significantly improved. Additionally, we believe that a sustainable solution to the MEV existential crisis requires full privacy and finality, which our proof-of-concept project does not possess. We hope to receive feedback from the community as MEV-Geth progresses towards a finished version.

Flashbots: Our Organization
Flashbots originated from the MEV Pi-rate Ship, an interdisciplinary research group that is neutral and unbiased towards the chain, supporting theoretical and empirical research related to MEV.

Research and development are two closely integrated engines that promote the staged development of Flashbots:

Our research work will be maintained for a long time. We will use research to define and update our roadmap, defining stages of organizational development and associated milestones;

Development work is targeted at milestones. We will organize a product-centric team to provide key infrastructure and ecological tools while collecting data and producing other tools that can feed back research.

Our research requires open, transparent, and iterative collective creation, drawing inspiration from academic and applied research, and using the Ethereum Upgrade Proposal (EIP) process as a template. Research can be supported financially by the MEV Investigator Program.
public commitment
As an open research organization, we pledge that, henceforth, we will:
Use our creation to protect the core values of Ethereum: openness, non-accessibility, decentralization, and meet the crisis caused by MEV;

Open source our research and the code for Flashbots core infrastructure so that all 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 relationship between key participants in the entire ecosystem is established joint;

Contribute to open ethical research questions 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: demystification, democratization, and distribution. For each section, we list the questions we try to answer:
Uncover the Dark Forest

How can the negative externalities introduced by the MEV extraction process and the impact of Flashbots' technology be objectively measured?

How to quantify the harm to users due to the MEV extraction method and provide developers with tools to reduce the impact of the application?
How can more transparency be introduced into the MEV space so that the community can develop social norms for MEV extraction?
How can market mechanisms that lead to concentration of power be avoided?

profit distribution

How can the MEV extraction process be efficient and free of entry barriers?
How can MEV opportunities be made equally accessible to all?
profit distribution

How can a sustainable incentive compatibility model be established among miners, traders, DeFi developers, etc.?

How can part of the profits be diverted to the production of public goods (such as Ethereum client development) to form a virtuous circle?

How can the negative externalities extracted by MEV be minimized and the positive externalities maximized?

Research Roadmap - Phase I

We split the research roadmap into different phases, allowing subsequent research to build on previous successes and conclusions. Phase I consists of two studies:
Paper 1: Flashbots Architecture
Summary: Describe the architecture and design tradeoffs of the infrastructure we are developing

What kind of auction mechanism is a "good" mechanism when searchers and miners communicate transaction ordering preferences?

Is there a formal mathematical definition of such a "good" mechanism? How to use the existing auction theory literature to create a transaction pool auction theory?

Will these mechanisms perform differently in PoW/PoS/leaderless algorithms and rollup contracts with transaction ordering auctions?
Paper 2: The Ethics of Flashbots
Abstract: Discusses the ethical issues associated with MEVs and the infrastructure we develop
Should we develop a "good" auction mechanism for communicating transaction ordering preferences?
How to minimize the damage to consensus and users caused by bribery incentives for competing for priority?

Should MEV be allowed on the system? Should MEVs be restricted? What social norms are needed?

What level of transparency should be allowed in MEV extraction?

How is MEV characterized in jurisprudence? What kind of industry self-regulation should be formed?

Call for Feedback and Contributions

Contribute to MEV-Research

We welcome you to check out our MEV-Research Github repository to learn about the MEV Fellowship program. Start contributing by opening 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 mining pool, you are welcome to review our code and try MEV-Geth. If you are a DeFi trader running a bot, you are also welcome to test Flashbots and try out as a scout. Join our Flashbots discord channel, or contact us at info@flashbots.net.

Subscribe to the MEV Ship Calendar

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