How could the merge lead to "base layer" censorship?
Could there be a soft fork and competing PoS Ethereum chains?
Our analyst @MattFiebach breaks down the facts (1/16)🧵
2/ MEV
"MEV is Maximal Extractable Value. It is the profit a block proposer (miner or validator) can make through their ability to arbitrarily include, exclude, or re-order transactions from the blocks they propose." - FlashBots
3/ In PoS Ethereum, larger validator operators could create sophisticated/proprietary methods to extract more MEV out of each block than single validators.
With liquid staking derivatives (Lido) and decentralized pooling, validators may extract MEV without sharing with stakers.
4/ The Solution: Proposer Builder Separation
Validators don't order blocks / extract MEV themselves. Instead they rely on a market where outside actors produce complete blocks accompanied with a fee for the validator.
The validator proposes the block that nets the highest fee.
5/ There are 3 main players in PBS
Builders: Organize blocks in order to achieve the most revenue for Validators (highest MEV). They take a cut off the top.
Relayers: Circulate builders' blocks to proposers.
Proposers: Validators, submit blocks.
6/ Relayers are the key to the castle. They abstract block ordering (so that validators can't copy ordering while removing the builder's cut) and choose which blocks to show validators.
This is where it gets interesting.
7/ MEV Boost is an implementation of PBS built by Flashbots.
It will run their own Flashbots relayer by default but, likely, other relayers will be available at Merge too.
Relayers must be trusted by validators and builders. They can both censor blocks and front run.
8/ Censorship
Let's say Coinbase or other significant size validators decide they won't produce blocks that include txns to/from government sanctioned addresses.
They will choose a relayer whose blocks don't include sanctioned addresses.
9/ If most validators choose the same route, block builders who include "bad" transactions won't see their blocks published on chain.
In other words, block builders will have to stop including sanctioned transactions in order to make money.
10/ This is the "base layer" censorship many are hysterical about.
There has been a ton of FUD that Flashbots Relayer, which is currently closed source, will censor transactions.
This tweet leads me to believe that is probably not the case.
13/ In the scenario enough validators (>51%) take the path of censorship, it will be time for a user activated soft fork (UASF) by those that oppose censored Ethereum (probably most).
But this is where things get really tricky.
14/ Will Circle (USDC) support the censored chain or the not censored one? If they choose the censored one (as is likely), well, we might be screwed my permissionless-supporting friends.
Convex collects and redistributes 17% of all $CRV and $FXS earned by its LPs. The fees are redistributed to further align the interests of all protocol users.
Solana is breaking into the smartphone segment and taking Web3 mobile with the launch of @solanamobile and the introduction of Solana Mobile Stack (SMS).
What is it and what does this mean for @solana and crypto's future?
@solanamobile@solana@ryan_swansonx 1/9 Solana’s Saga phone and their development stack, Solana Mobile Stack (SMS), have the potential to create a Web3-based mobile ecosystem.
While many have tried to dethrone the smartphone duopolies, legacy corporations continue to control most of their respective industries.
@solanamobile@solana@ryan_swansonx 2/9 Over the past decade, mobile traffic has grown more than 8x from 6% in 2011 to 56% at the end of 2021.
Crypto's growth over the same period has been sanctioned to desktop applications, but not anymore.
A bi-weekly report covering the Bitcoin Mining sector by @ryan_swansonx
@ryan_swansonx 1/ The price of Bitcoin has continued to decline following a string of industry-specific events laid on top of a deteriorating macro environment.
BTC has established a range around $20,000 for the first time since late 2020.
@ryan_swansonx 2/ This spells trouble for miners as the cost of production has simultaneously increased putting pressure on profitability.
Only those with the lowest energy costs and highest quality equipment are making a profit today.