The “intellectual posture” highlights the vulnerability of the extractable value of Ethereum
A “personal project” by a developer could bring even more controversy in the so-called miner-extractable value (MEV) practice on the Ethereum blockchain (ETH), possibly tempting some miners to extract all the value they can. Ethereum before it moved to a Proof of Stake (PoS) consensus mechanism, as the move forces them to seek new sources of revenue.
The project, initiated by Edgar Aronov, CEO of the hackathon platform Eventornado, would allow miners to programmatically rearrange chains to capture SRM, as reorganization, also known as reorganization, allows miners to remove previously confirmed blocks from a blockchain. For example, in theory, recent transactions on a blockchain could be rolled back to recover funds lost in a hack.
Meanwhile, SRM is a measure of how much profit a miner can make from his ability to arbitrarily include, exclude, or rearrange transactions within the blocks he produces, for example Paradigm research. According to them, if two miners, Mi and Ner, are paid $ 100 each and Mi finds a block with an arbitrage of $ 10,000, he can decide to rewrite the first block, take the arbitrage for himself, afterwards. which Mi is re-engineering other blocks he also found, capturing all of the SRM there too.
Furthermore, this is a “time bandit” attack: if the block rewards are small enough compared to the SRM, it may be rational for miners to destabilize the consensus, the researchers say.
According to them, VPD is an invisible tax that miners can collect from Ethereum users, and it inherently encourages consensus instability. And while MEV can also be seen on the Bitcoin Network (BTC), “our hypothesis is that Bitcoin is inherently less exposed to MEV than blockchains like Ethereum,” according to the researchers.
And now, according to for Aronov, his code would allow such a “reorganization on demand”. He also noted that it is not yet implemented, but it is a chance to design the application programming interface (API).
He said Cryptonews.com that it’s his “personal project”, that he “just started it” and “it doesn’t exist” yet.
William Foxley, Editorial Director of Mining compass, described the proposal as “an area that miners and others did not want to go because it would harm Ethereum’s consensus and therefore its assets”, but also that miners have nothing to lose, given that PoS is coming to the network with the deployment of Ethereum 2.0 (ETH 2.0).
In PoS, validators do what miners do in Proof of Work (PoW). Validators are chosen at random to create blocks and are responsible for verifying and confirming blocks they do not create.
Foxley also argued that this code would be even more damaging than front running – an event where robots offer a higher price for gas on a trade, prompting miners to put it earlier in the line when building the block. , because the most profitable transactions are executed. first, and only the first trade of the same contract call will take the profit.
@wtogami It’s even more damaging than the simple head-on run, as the time bandits attack the old reorganization blocks to score vâ¦ https://t.co/3qdBIaGkoU
“This is all great in theory, but there are tons of huge holes,” Michael Carter of the Miners YouTube channel Bits Be Trippin Told Cryptonews.com, giving three examples:
- this would mean that the largest mining pools would implement this activity and only have a 40% or less chance of winning it (e.g. ethermine.org has 33% to 40% of the network at any given time) – that’s is vampiric in nature to the ecosystem and the pool would likely lose half of its hashrate immediately if they tried;
- it has to be assumed that miners are just short-term profiteers and don’t care about the ecosystem, which Carter says is “totally incorrect given that most large miners, especially those listed in stock exchange, hold as many indigenous mining currencies to reinvest / use / deploy in the ecosystem â- this activity would therefore be counterproductive;
- the whole argument / theory is “an intellectual posture between a handful of engineers who are crafting the architecture / design to prove a point, which will quickly run out of interest once people point out” two previous points.
Will PoS help you?
While it looks like reorganization will remain a factor in the next release of Ethereum, how it will be affected by PoS and how it will affect Ethereum at this point is still a matter of debate.
Research group Flashbots mentionned that MEV will remain in ETH 2.0 – the difference being that validators will have control over the ordering of transactions instead of miners. According to them, “MEV will significantly increase the rewards of validators, but could reinforce the inequalities between ETH 2.0 participants”
however, according to For developer Ryan Berckmans, Ethereum’s current mainnet will eventually merge with the PoS system, and this merger will include three structural protections against time bandits, namely:
- the validators being in fact long ETH against the miners being structurally long ETH
- validators stay forever against long-term skinless minors in the game
- short reorganizations becoming slashable and long reorganizations impossible.
Additionally, according to Paradigm Research, proof-of-stake blockchains can punish validators who attempt to reorganize, thus making time bandits “considerably more expensive”, especially when combined with a strong purpose (after a short period of time). time, a block is declared final and can never be modified). However, “with enough SRMs, the incentive for reorganization could still be greater than the reduction penalty,” they said.
Like Alyse Killeen, the founding managing partner of StillMark, a venture capital firm and member of the board of directors of Block flow, Noted, “Once you rely on the benevolence of the miners, you are in trouble.”
Nunchuk Founder Hugo Nguyen also argued that the PoW consensus is clear and transparent, but that “PoS is an obscured PoW”, adding that “because PoS is an obscured job, PoS” miners “can find loopholes to steal your money.”
In both cases, according to Carter, front running has been taking place since early 2017, it will continue and could arguably be worse in PoS given that validators are advertised by epoch (an era of time within a blockchain network ), allowing “for more interesting” pay for position / off-chain transactions “because the processors / validators will be known in advance. “
That said, many commentators under Aronov’s posts and elsewhere have concluded that if implemented, this “on-demand reorganization” and speeding up MEV mining would be detrimental to Ethereum.
I cannot stress enough the terrible idea of ââspeeding up the process of mining MEV via the Ethereum chain … https://t.co/RZHucmrADk
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