foreign
[Music]
my name is torgen I also work at chain
security
and today I'm going to be talking about
what I call Future block Mev in proof of
stake so what the hell is future block
Mev supposed to be
um to understand that first we have to
talk about block production and how it
changed
um with the merge that happened a couple
weeks ago so in proof of work every
Miner tries to mine every single block
and what that means is at no point can
you know who the next block producer is
going to be
but improve of stake that's a little bit
different and there we actually decide
ahead of time who the proposer for which
block is going to be and in particular
for ethereum we use the randow value
together with the current validator set
to do this and that means that you can
always know all the block proposers for
the current Epoch and for the next epoch
and since two epochs and ethereum take
about 12 minutes that means that if you
are a validator on ethereum you will
know up to 12 minutes ahead of time when
you will actually be the one that is
able to produce a block
um so now what do you do with this
information
this is what I call Future block Mev
um so
if you are the block producer for a
block you can control the transactions
that are included and The Ordering of
the transactions
um so if you know that in some block n
plus one you are going to be
um controlling that block you can do
some weird stuff in the blog before that
in Block n which you wouldn't do usually
so one example of that would be that if
you want to do an oracle manipulation on
uniswap
um the way that you do that is you buy
some asset like here we have some asset
that is worth one and then you buy
enough of that to let's say move it to
six
and then the uniswap Oracle will always
record the price in between two blocks
so it will record this price of six at
the end and we'll take that into its uh
average that it reports
and now usually this would be very
expensive to do because everyone would
see that this price is incorrect so
there's obviously a really big Arbitrage
opportunity that somebody could take
um to like sell this asset at a higher
price than what it is actually at and
that means that for the attacker this
would be really expensive but because
now we're assuming that the attacker is
actually the block producer for Block n
plus one they can just put their own
transaction at the very beginning of the
block n plus one and they can guarantee
that they themselves are going to be the
one that takes this Arbitrage instead of
anybody else
so essentially they are able to hide the
Mev
um from the other Searchers and here
we're assuming that there is some
mechanism in which they can make that
first transaction in Block n without
going through the public mempool so
maybe they put it like through flashbots
or something and that means that people
will only see the transaction on chain
at the point where it's already too late
because the next block is going to be
produced by the attacker and nobody is
going to have any time to to react
before that happens
um and so one example of what you could
do is if there was a lending protocol
that used such a uniswap Oracle
um you might be able to manipulate it
enough to get some uh
to get something into the liquidation
level where it can get liquidated but it
wasn't able to before
um and then that liquidation will be
available in Block n plus one and again
because you control it no other Searcher
is going to be able to compete with you
for it because you can just put your
transaction uh like in second position
for example in that block so then you
can trigger a liquidation without having
to compete with all the other Searchers
out there so what are the main takeaways
first of all the block proposers improve
a stake are known in advance and that is
different than it was in proof of work
and second of all this information is
valuable so for example you can use it
through
um doing manipulations or creating Mev
and hiding it like I said here but you
could also imagine that you could maybe
sell future
blog space and guarantee that to people
or you could even incentivize people to
um
create a lot of Mev in a block that you
will control like you can imagine if
there's some nft project they might not
care exactly in which block they're
going to be launching so you could just
tell them to launch in the blog that you
create and then all of the
um gas that is going to be spent on
minting those nfts early is going to be
in your block instead of somebody else's
so I wrote a paper on Oracle
manipulation and a blog post on how that
changes after the merge so if you guys
are interested in learning more about
the Oracle manipulation side of it I
highly recommend checking it out