MEV Day on StreamETH.tv

on

MEV Day is a 1 day conference dedicated to Maximal Extractable Value (MEV). They discuss what’s happening in the world of MEV with a variety of panels, talks and workshops by leaders in the industry. MEV is a centralizing force across stateful blockchains. How do we prevent blockchains from falling into the MEV dystopia? How do we decentralize the MEV game? How do we empower the users of blockchains?

Friday, April 22, 2022 in Amsterdam

Check out https://mevday.org/ for more information.

Streamed on Livepeer

The Venue

This event will be hosted at Tolhuistuin, one of the three dedicated DevConnect week venues.

The full-day event will be spread across 2 main stages and a hang out room:

Agenda

Dark Mode Stage | MEV Dystopia

🛣️ Chapter 1: The MEV journey

  • 10:00-10:30 MEV… wat do next? (Phil Daian | Slides)
    • Tl;dr: We take a journey through the past, present, and future of MEV. The MEV meme is at a critical inflection point, and is highly likely to affect the thought and consciousness of a much broader society soon. Centralization and exploitation abounds, and no project can be spared. This day is our critical mass. In many senses, this room decides the future. What should we choose? How can we choose it?
  • 10:30-10:55 MEV formalization (Alejo Salles | Slides)
    • Tl;dr: Despite the rapid spread of MEV awareness, we still lack agreement on its formal definition. In this talk, I will discuss the need for formalization and summarize a few of the existing approaches.
  • 10:55-11:20 Optimistic social sequencing: my ordering protocol is fair😎 ****(Xinyuan Sun | Slides)
    • Tl;dr: We present to you the ultimate fair ordering protocol: optimistic social sequencing that eliminates all MEV 😎😎😎.
  • 11:20-11:40 Why your blockchain needs an MEV solution (Hasu | Slides)
    • Tl;dr: At the heart of every blockchain is a blockspace market. We discuss the first and second-order effects if this blockspace market does not allow for open and fair MEV extraction. We show why all blockchains, including those with a single sequencer, can benefit from adopting a private mempool such as Flashbots. Video: Blockspace Market Design
  • 11:40-12:00 The multichain world is centralized 🙁 – studying cross-domain MEV (Alex Obadia | Slides)

⛓️ Chapter 2: The MEV supply chain

  • 12:00-12:20 MEV across crypto in 2021 (Robert Miller | Slides)
    • Tl;dr: In this talk, we review the extraction, externalities, and mitigation of MEV across various different L1s, rollups, and side chains in crypto. We also provide estimates for how much MEV was captured across crypto in 2021.
  • 12:20-12:50 The threat of MEV centralization: an anatomy of the transaction supply chain (Hasu | Slides)
    • Tl;dr: This talk introduces a new mental model for thinking about MEV market structure: the transaction supply chain. We posit that left unattended, this supply chain will always gravitate toward vertical integration, ultimately threatening the fabric of the underlying blockchain.
  • 12:50-13:20 Let me in! Let me IIINNNN! A longitudinal study of the transaction supply chain from CryptoKitties to MEV-Boost to PBS (Barnabé Monnot | Slides)
    • Tl;dr: We review the evolution of the blockspace market, from its naive beginnings to its increasing sophistication. The talk will highlight the uniqueness of Ethereum’s environment, with users and transactions acting on a shared state space (“the world computer”), and its consequences on the nature of blockspace. We also discuss the tension between leaving market mechanisms outside of the core protocol, vs integrating them in-protocol.

<aside> 🔥 Fireside chats: mapping out the MEV ecosystem actors

  • 13:20-13:55 Validators: Coinbase, Chorus One, Rocket Pool, Lido, Blockdaemon…
    • Panel questions:
      • What are things Ethereum protocol can do to make home staking more viable?
      • Post merge when validators begin to participate in MEV, do you think MEV will make home staking more or less viable, and why?
      • When deciding how to participate in MEV, how do you think about mandating all block producers in your ecosystem to adopt a single approach (like Flashbots) vs leaving it to individual node operators?
      • MEV-boost by Flashbots is going to separate out block builders and block proposers, meaning that validators are accepting blocks from a 3rd party and proposing them without seeing the contents. What are the criteria by which you’re planning to select which block builder you’d like to receive blocks from?
      • How do you think about censorship at the block builder level? Would you be willing to switch to a builder that doesn’t censor even at the expense of profit?
      • How would you distribute your MEV profits? Are you planning on pro-rata (same % fee as regular staking rewards and transaction fees) or something else?
  • 13:55-14:30 Market makers and MEV searchers
  • 14:30-15:00 Wallets, aggregators & dApps
  • 15:00-15:30 Block builders

🔦 Chapter 3: the state of the art in MEV search

  • 15:30-16:00 MEV as an inner experience (Nathan Worsley | Slides)
    • Tl;dr: An introduction to the psychological warfare of MEV-engineering.
  • 16:00-16:20 How algorithms and psychology combine in EIP1559 PGAs – and what likely changes post-Merge (Matt Cutler | Slides)
    • Tl;dr: This talk explores the underlying interactions between in-block base and priority fees during periods of high network congestion such as NFT mint PGAs. We touch on research efforts to accurately model base fee futures, as well as posit how changes in block timing post-Merge may impact PGA behavior.
  • 16:20-16:40 It’s a trap (Dean Eigenmann | Slides)
  • 16:40-17:05 Symbolic MEV extraction (Georgios Konstantopoulos | Slides)
    • Tl;dr: Formal verification techniques like symbolic execution have historically been used for software security. What if we could use the same techniques to extract MEV?
  • 17:05-17:30 Convex optimization for fun and profit (Theo Diamandis | Slides)
    • Tl;dr: Tired of fragmented liquidity? Wish you could get the best price across DEXs? Routing heuristics getting you down? CFMMRouter.jl is an open source, free-range, grass-fed solution to your woes. In this talk, we will introduce the optimal routing (and arbitrage) problem and tackle it using convex optimization.
  • 17:30-17:50 Don’t reinvent the (Geth) Wheel (Libevm | Slides)
    • Tl;dr: Sandwiches taste better when made by someone else. In this talk, we’ll dive a bit deeper into the lesser-known features that Geth provides out of the box, and how that can help you in your searcher journey.

🎹 ”Key Note” Performance

Light Mode Stage | MEV Utopia

🔮 Chapter 1: Town Hall

🧬 Chapter 2: MEV-aware protocol design challenges

2.1 MEV-thereum

2.2 Cross-domain MEV at different layers of the stack

  • 12:00-12:30 L2 sequencing and MEV (Ed Felten | Slides)
    • Tl;dr: Sequencers, which manage the ordering of transactions on L2 chains, create ordering and MEV challenges that are unique to L2 systems. This talk will explain the mechanisms and design constraints in L2 sequencing, explore the MEV issues that result, and discuss one response strategy based on distributed fair sequencing.
  • 12:30-12:50 MEVA 2 years in (Ben Jones | Slides)
    • Tl;dr: 2 years ago, Optimism introduced the concept of L2 sequencers and MEV Auction (MEVA), the idea that sequencing rights for an L2 chain may be sold by the protocol itself as a method of determining MEV in the chain. This talk will reflect on developments in both MEV and L2 since and discuss Optimism’s MEV strategy moving forward.
  • 12:50-13:10 Protection built into L2 using threshold encryption (Jannik Luhn | Slides)
    • Tl;dr: We’ll be presenting Rolling Shutter to bring MEV protection to rollups. It builds upon our previous efforts of using threshold encryption to combat front-running and malicious MEV. However, it implements the DKG-scheme directly into L2/rollup sequencer mechanisms in order to protect all dapps deployed on the rollup by default. This also increases censorship resistance and potentially latency properties of rollups. We’ll also mention a proposal to implement a Shutter-lile mechanism into L1/the beacon chain.

<aside> 🌉 Bridges

<aside> 🧭 Data Availability

  • 14:10-14:30 Exploring MEV in the modular blockchain stack (John Adler | Slides)
    • Abstract: We explore how modularizing blockchains into data availability, settlement, and execution layers affects (or doesn’t) opportunities for MEV. </aside>
  • 14:30-15:10 Round table: MEV-aware design space for L2s and bridges (Angela Lu, Ed Felten, Ben Jones, James Prestwich, John Adler, Arjun Bhuptani)
    • Panel question: How could MEV specific to your layer of the stack positively or negatively impact MEV on other layers and/or the entire system?
      • For example: ⁃ Positive: Are data availability layers the natural place to democratize cross-domain MEV? ⁃ Negative: Could centralization in the sequencer model of rollups be a centralizing force for other layers that require decentralization such as Celestia?

🧩 Chapter 3: MEV-aware application design challenges

  • 15:10-15:40 The limits of AMM Privacy and MEV (Tarun Chitra | Slides)
    • Tl;dr: As you can see on Flashbots’ MEV Explore, the most common type of extractable value involves value extracted from constant function market makers (CFMMs). This value, most often in the form of a sandwich attack, is generally extracted because users are not strategically choosing parameters (such as slippage limits) as a best response to other participants. In this talk, we’ll talk through the results of our recent paper, which demonstrate a mechanism where users can provably mitigate the likelihood of being sandwiched by trading-off price execution quality. This result suggests that MEV, at least for CFMMs, corresponds to a privacy-utility trade-off. We end with thoughts on what searcher-user-miner equilibria look when all participants are strategically choosing best responses and argue for the existence of a coarse correlated equilibrium.
  • 15:40-16:00 MEV-aware DEX design (Will Warren | Slides)
    • Abstract: In 2019, 0x protocol adopted a novel fee mechanism to internalize MEV targeted by arb bots engaged in priority gas auctions (PGAs). In this talk, we review the fee mechanism, empirical data from trading activity on Ethereum mainnet, as well as the impact that EIP1559 and Flashbots had on the mechanism’s viability.
  • 16:00-16:20 Minimizing MEV with sealed-input batch swaps (Henry de Valence | Slides)
    • Tl;dr: In this talk, we’ll discuss a design to minimize MEV with sealed-input batch swaps. We’ll describe how this design falls out of an attempt to solve a different problem, namely, how to allow private interaction with public shared state, and leads us to a new execution model: frequent batch transactions, with no transaction ordering and no transaction visibility. Finally, we’ll see how this execution model opens up new possibilities for AMM designs.
  • 16:20-16:40 DKG/TPKE for fair ordering and a proposal to frontrun cross-chain MEV (Christopher Goes | Slides)
    • Abstract: In this presentation, we present the cryptographic constructions of Ferveo, a distributed key generation and transaction threshold decryption protocol for frontrunning prevention. We go into the details on distributed key-exchange and threshold cryptography from a practical point of view. After describing the protocol, we sketch how it might be used in a multi-chain context to encrypt bridge data packets and head off cross-chain MEV.
  • 16:40-17:00 MEV Reduction via Batch Auction (Alex Hermann | Slides)
    • Abstract: MEV reduction on the application layer is important. Batch auctions are a promising venue to reduce the MEV of trading activity. This talk will investigate the benefits, but also all the challenges and shortcomings of batch auctions usage.
  • 17:00-17:45 Round table: batch auction deep dive (Phil Daian, Eric Budish, Felix Leupold, Tarun Chitra)
    • Panel Questions (doc):
      1. Batch auctions were first popularized by Budish et al as an alternative mechanism to reduce the impact of HFT on honest market activity. How do these original batch auctions differ from the batch auctions proposed in blockchain today? What in your opinion are the most important batch auctions innovation this audience needs to pay attention to?
      2. Batch auctions are frequently modeled as having nice properties under some economic model. How do we model the world outside of batch auctions, and its affect on the batch itself?
      3. Cryptocurrencies differ from traditional markets in many ways. Lack of identity/KYC, Sybil attacks, P2P issues, and many others plague the systems we have observed. What are the unique challenges to deploying batch auctions in this setting? How do adversarial strategies play into the modern batch auction ecosystem? What are some possible defenses?
      4. Do you execute your trades on a batch auction, wherever they happen (in tradfi or defi)?  If yes — why? If no — why not? (you don’t need to leak your real strategy but answer as if you were)
      5. What are the best use cases for deployment on a batch auction today… what type of trade would you never make outside of a batch exchange?
      6. Are there hybrid exchanges that combine batch and real-time exchange? How do these exchanges merge liquidity without corrupting properties of the batch?
      7. Are there empirical ways users can choose between batch and other auction mechanisms in real-time? What is the best metric for classifying user “gain” (or harm) in batch auctions today? Is there a good dashboard for them to use?
      8. What were any unexpected challenges to batch auction deployment experienced by the panel participants?
      9. What future work / research is left in batch auctions?

Resources

Blockchain Networks

Below is a list of EVM compatible Mainnet and Testnet blockchain networks. Each link contains network configuration, links to multiple faucets for test ETH and tokens, bridge details, and technical resources for each blockchain. Basically everything you need to test and deploy smart contracts or decentralized applications on each chain. For a list of popular Ethereum forums and chat applications click here.

Ethereum test network configuration and test ETH faucet information
Optimistic Ethereum Mainnet and Testnet configuration, bridge details, etc.
Polygon network Mainnet and Testnet configuration, faucets for test MATIC tokens, bridge details, etc.
Binance Smart Chain Mainnet and Testnet configuration, faucets for test BNB tokens, bridge details, etc.
Fanton networt Mainnet and Testnet configuration, faucets for test FTM tokens, bridge details, etc.
Kucoin Chain Mainnet and Testnet configuration, faucets for test KCS tokens, bridge details, etc.

Web3 Software Libraries

You can use the following libraries to interact with an EVM compatible blockchain.

Nodes

Learn how to run a Geth node. Read getting started with Geth to run an Ethereum node.

Fix a transaction

How to fix a pending transaction stuck on Ethereum or EVM compatible chain

Next Review – Vaults and the ERC-4626 token contract