foreign
[Music]
hi everyone uh my name is Jolene and I
work at flashbots research and today I'm
going to be talking to you about
evaluating the architecture called
proposer Builder separation given the
things that we've learned and the
insights that we've gained since the
deployment of math boost and I'm also
happy to take some questions at the end
if we have time so as a brief
introduction uh what's the point of this
how are PBS and mavoos linked or how are
they different so probably most of you
are familiar with these ideas already
but just to make sure that we're all on
the same page proposer Builder
separation refers to an architecture
that separates the functions of block
building and block proposing within the
core ethereum protocol so instead of the
block proposer in this case the
validator going to the mempool and
building their own block which they
would then
proposed to the rest of the network
all block construction would be
outsourced to actors that we called
block Builders so the idea is that the
only thing that the validator would have
to do Under full PBS would be to choose
the highest value block that's presented
to it when it's time for its thought
block building is a you can think of it
as like a revenue generating activity
there are economies of scale involved in
it and opportunities for things like
private order flow that might give you
an advantage over other builders so
basically there are incentives for Block
Builders to centralize and to become
more powerful as time goes on so that's
a trade-off that was kind of known about
and made and accepted at the time the
PBS would take this centralizing Force
out of the ethereum consensus layer and
put it into the Builder Market
and then
logically the only kind of interface
point would be where the validator is
sending these calls to the Builder
Market on picking the best block that
comes back like I said so the idea is
that kind of stuff can get uh very ugly
in the Builder Market but we don't care
because the core of ethereum the
consensus layer is safe from the effects
of Mev so where does Mev boots come into
this and how is this related so meth
boost allows validators to engage in an
experimental version of PBS on this
Builder market so it's completely
optional but if you have a validator and
you're now running mob boost you can add
Source your block building to a kind of
a burgeoning market of block Builders
relays Searchers that are all competing
to give you the best block
and the reason that this happened was
because
um if you're familiar with the old
flashbots auction this wasn't going to
work after the merge so we knew that we
needed to kind of upgrade it and do
something different and so flashbots
worked with the ethereum foundation
um to make this piece of Open Source
software that could act as a prototype
for
this longer term Mev solution for
ethereum which was PBS so in this way we
are able to test this idea of PBS
through mad boost rather than kind of
putting it in the protocol and then
being in trouble if it doesn't work or
something bad happens
here is a quick diagram of what I'm
talking about when I say the Builder
Market
um and I really just want to go through
this quickly just to make sure that
we're all on the same page because the
later things will be a little confusing
um if you don't understand this so what
we have right now kind of on the left
hand side is a validator running mode
Boost Mobile Boost allows it to connect
to this Builder Market if the validator
is not running move boost officially it
should not be participating in this
Builder Market
so in order for this to work there are
certain rules that need to be carried
out in the Builder market so over on
the right hand side we start with the
users so they originate transactions and
those transactions either go to the
public mempool on the top or maybe some
private mempool that Searchers or
Builders are allowed to access
um and then we have Searchers who would
be monitoring the public mempool as well
as any private sources of transactions
that they have and they would be
forwarding their bundles along to these
specialized actors that we call block
builders
block Builders will be receiving bundles
from Searchers maybe they're also
monitoring the public mempool maybe they
also have their own private sources of
transactions too and they will be trying
to build the most profitable block for a
slot so they'll forward blocks to relays
and the relays here
it's different to
if you're familiar with the flashbots
architecture before the relay here kind
of has a different role so it allows
validators to register with it and then
when a validator requests a block for a
particular slot the relay will forward
the block that has the highest payment
attached to it and then that validator
will receive that payment for proposing
this block to the rest of the network
so when I say the Builder Market
experiment webmav boost this is what I
mean uh and when we talk about full and
protocol PBS we are trying to figure out
a version of this that has the important
bits that enable this Market kind of
baked into the ethereum protocol so that
means nomev boost and probably no relays
as well
um so the question that I wanted to ask
and kind of answer try to answer in this
presentation is how is this experiment
going so map boost in this early version
of the Builder Market have been it's
been alive for about a month now so can
we tell if things are going the way that
they thought we would would it be safe
to put PBS in the core protocol today
you know as this experiment is without
any further features or enhancements and
are there any warning signs or maybe
early indicators of things that we
should be worried about when I was
thinking about this question like how
could we tell if the experiment is
working I started thinking about PBS as
a kind of an organizational principle so
it seems to be very widely accepted that
this kind of clean separation
um between the Mev activity on the rest
of ethereum with only this Market in
between as an interface point is
desirable and also possible so it's
probably not very helpful that the idea
of PBS is I think relatively simple and
easy to understand and sometimes we can
be biased towards things that are that
are like that when the real problem that
we're trying to address is much more
nuanced and complicated so the previous
question kind of turned into these
questions is abstracting the Mev away
from the core protocol a good
obstruction or does it leak are there
more interface points between where the
Mev is happening on the core protocol
then people would lead you to believe
and if things get very very bad in the
Builder Market maybe imagine a very
small number of
very powerful very centralized actors
that dominate block building are there
really no knock-on effects on core
ethereum assuming at some point in the
future we have a full and protocol PBS
in this uh in protocol PBS world I
started thinking about what parts of
ethereum are still influenced by Mev and
I came up with kind of two families of
effects so the first order effects are
kind of the Direct effects on the core
protocol so these are places where even
though this Mev is supposedly over on
the other side of the room and it
doesn't affect ethereum it's still it
still influences part of it and the
other type are more kind of second order
effects so how would how are actors
incentivized to try and influence the
base layer if it meant that they could
gain more favorable conditions for
themselves
so my idea for this was to try and
identify a few concrete examples of
these effects and then kind of check
data to see if there's any indication
that these things are happening already
and then if these effects were to get
more pronounced as the Builder Market
develops are these really an issue
and if so what kind of medications might
we need
so let's have a look at the first kind
what parts of ethereum are still
affected by Mev under fall in protocol
PBS so it might be more than this but
these are the main ones that I came up
with for now so the first one is the
contents of the block so we are now
getting these blocks from the Builder
market so now all transactions in the
block can be directly influenced by Mev
and this wasn't the case before because
it was possible for minors or validators
to kind of opt out of using my booster
MAV geeth if they really wanted to so
in the future
if most or all of the blocks come from
the Builder Market the purpose of the
builders is to reorder and rearrange
transactions their block can be as
profitable as possible so hopefully that
one's kind of straightforward this kind
of idea of like losing control of plot
content
the second one is maybe not so obvious
so the contents of the public mempool
are influenced by Mev Under full PBS so
how can that be well in a world where we
have full-in protocol PBS Builders are
incentivized to have private sources of
transactions that we talked about
earlier and we call this exclusive order
flow so if Builders are competing just
on the contents of the public mempool
there is and there's no difference
between the kinds of transactions that
they have available to them then their
success comes down to
um maybe their algorithm or their
trading strategies however the more
order flow that they have access to that
other builders do not the more likely it
is that they can build a better block
with that
on our flashbots we generally think that
order flow is going to be a big
differentiator in how successful block
Builders are going to be and if this
order flow is exclusive in that it's
going to a private mempool instead of
the public mempool
um
it's it's not going into the public Med
pool so you you could have this
situation where
um as as there is more Mev activity
because
the the Builder
um
what is happening with the builders is
associated with this Mev than the
contents of the public mempool might get
smaller
um and then the last one which kind of
relates to the first but maybe a little
bit of a different Focus
um blog posters as block proposers used
to have control over
um what the contents of their blog would
be so Under full PBS there used to be
sorry the the big difference would be
the validators will now accept full
Blocks From the Block Builders and that
didn't happen before so in the old kind
of flashbots model you we would now
never have
um full blocks coming from
um external sources
um and then the second thing is that uh
I'm not sure if this is for certain yet
but we think that you know Under full in
protocol PBS there may not be an option
for Builders to or for validators to opt
out of that so you might have no choice
but to get your blocks from
um from an external market and then kind
of going on to the second family effects
so how are actors in the Builder Market
incentivize is to mess with the base
layer the consensus layer in order to
gain an advantage on the big issue that
I see with this is that the Builder
Market is actually out of protocol so
there's nothing enforcing participants
in the Builder Market to stick to the
structure that we saw in the diagram
earlier the map boost architecture that
exists is kind of a template for what is
safest for like independent ecosystem
aligned parties like flashbots to run
under a certain number of assumptions
baked into it in reality we can't stop
anyone from using for example their
profits to buy validators their profits
from building creating their own private
version of mevust or offering services
around Builders or other parts of the
system and as we're about to see
measuring what comes through a relay
might not necessarily be the full
picture of what's happening in the
Builder market so the only part of the
Builder Market that's in the core
protocol is this Builder specification
which divines like the API calls and
sequence between the validator and some
software that looks like MAV boost on
that side of that kind of anything goes
by now we've identified a few kind of
concrete areas where we think that Mev
might still affect the core protocol
Under full PBS so what can we do with
this well there have been a lot of
really awesome data collection efforts
by various parties in the ecosystem in
the last few weeks since the merge what
if we took a look at some of these and
see if there are any clues based on
these areas that we've identified it
that this prototype Builder market via
Mev boost is starting to affect the core
protocol in an undesirable way
um and so the first question that we
want to ask is going back to what we
identified previously how much block
content right now is currently decided
by the Builder market so here is a graph
that measures how many blocks have come
from relays since the merge so as you
can see
um as of today we're up to 60 percent of
blocks coming through relays and I
looked at these this graph last week and
it was about 45 so it's increasing uh
quite quickly
and again it's important to note here
that this might not be the full picture
so many of these dashboards measure what
comes from relays and this might not be
an accurate reflection of what blocks
are coming from the Builder Market as a
whole so it's probably best to think of
this
as a lower bound
on how much block content is coming from
the Builder Market that seems to be
increasing over time and then on to the
second question so is the public mempool
changing since math boost launched so
here is a graph of the count of
unconfirmed transactions in the mempool
over the last 30 days and if we look
back at when the the merge happens
September 15th it it looks like
something may be different so the
Baseline seems to be a little bit lower
and
what I would expect to see over time if
my speculation is correct is this
Baseline kind of trending downwards
however I don't think I could say at
this point that this is definitely
because of Mev
um my plan is to to keep monitoring this
and look into other things that might be
affecting the mempool since the merge
and the next question is linked to the
idea of things kind of getting nasty in
the Builder market and if there are
actors with big advantages that they
might you know use they might be in a
position to use those to start to
influence the base layer so are there
early indicators that Builders are
centralizing so this chart measures
block Builder's success since the merge
so percentage of blocks that landed that
came from a particular Builder so if we
think of that 60 that we saw in the
diagram a few slides ago
how many of that 60 came from a
particular Builder
and the orange one is flashbots so that
doesn't really look great right now
however if you look closely it does seem
like flashbots is losing its lead a
little bit as time goes on or as some
other people have pointed out to me that
the non-flashbot slice looks as though
it might be kind of diversifying a
little bit
but the point that I'm trying to make
with this is that it doesn't look like
flashbots you know is
as the dominant Builder has a lead
that's growing and growing over time
um but this is probably another good
thing to keep an eye on
um
and so when I talked about actors trying
to influence core ethereum in ways that
we haven't thought of yet I think the
big one for me is whether Builders and
validators will eventually decide not to
bother with the out of protocol Builder
market and just start making deals with
each other directly and this is the kind
of activity that's much more difficult
to see we really need to keep in mind
that the Builder market so this thing
that validators are able to send their
requests to at the moment on what goes
through Mev boost on the relays is not
the same thing
so what we would need to find out here
is if there is a way to tell if there
are blocks produced via some external
source that are not going through math
boost or a relay and I think this is
possible but and managed to do it in
time for this talk
but by examining this number over time
we could deduce that perhaps Builders
are being connected directly to
validators bypassing the relay
components entirely because if you're a
big party with a lot of order flow and
either access to a lot of validators or
perhaps the means to acquire validators
you don't need to participate in all
this relay and Builder competition
business so I think we want to keep as
much of this activity in the light as
possible
this is something that I think is really
important and will continue to work on
so looking at the indicators that we
found are these things actually problems
if the trends that we identified
continue and possibly become more
pronounced what negative effects on
ethereum could we expect
so we saw previously that we are
currently around 60 of ethereum blocks
now coming from the Builder market so
extrapolating from this should we be
worried if 90 of blocks are coming from
the Builder market and I think the main
problem with this is censorship and
hopefully you can see by now why
censorship is the big kind of topical
issue with PBS that a lot of people are
talking about if the centralizing
Dynamics that we're expecting start to
play out it's possible that you know 90
plus of blocks start to come from a few
actors and as we know it's it's easier
to censor at the Block Builder level
than it is to censor at the consensus
level we also saw that there seems to be
a decrease in transaction volume in the
public man pool post merge and if that
speculation is correct and it turns out
that this is a symptom of transactions
being diverted from the public mempool
and into private pools what implication
might this have
and one of the solutions that people
propose
um or maybe one of the kind of
additional features that people want to
see for math boost or full PBS is this
idea of a fallback solution so that
would be allowing you know if something
goes wrong you allow your validator to
build blocks locally and then compare
those to Builder Market blocks that have
been produced and then you would only
accept the Builder Market blocks under
certain circumstances so the issue here
would be if the public mempool you know
maybe got so small that effective
fallback Solutions like this either
weren't possible
or relied on the validator being
altruistic in that building from the
public mempool
alone is completely not competitive
compared to
um the Builder Market
um and for this so we still don't know
if this is happening yet but if it did
happen that we end up with builders that
have ad size profits it might make sense
for Builders to start staking their
profits and running validators and there
might be entities that own a lot of
validators already that want to start
block building and there's likely to be
a business model where Builders can
offer services based on how many
validators that they own so I don't know
if anyone saw Alex Stokes talk yesterday
on block building after the merge but he
had a slide with like a giant list of
different ways that you know block
Builders could monetize this kind of
relationship and decentralizing the
Builder role itself might not be
feasible here as we're kind of out of
protocol at this point and therefore
Limited in what we can force Builders to
do
we've identified a few different things
that if left unchecked might cause US
problems down the road and I think
there's good awareness around most of
these already especially the censorship
resistance schemes which is very topical
but there are a few other things that
given these early indicators might also
be
um a priority
so
censorship resistance I think we know
about that already
something called transaction inclusion
lists I believe is being actively worked
on by flashbots and other people in the
ethereum ecosystem
um
many it's over the other things many of
the effects that I talked about can be
lessened if we take steps to ensure that
things can't get very centralized and
ugly in the Builder market so trying to
figure out how to effectively
decentralize the Builder role might be
important while also keeping in mind
that a decentralized builder has to be
competitive
compared to a centralized builder in
order to make any difference
another thing that I think is important
are mechanisms to ensure that Under full
in protocol PBS validators can still
build their own block or perhaps augment
blocks that they receive and the reason
that this is important is that a lot of
these kind of extreme effects that we
extrapolated assume that Under full PBS
100 of proposers will be getting blocks
from the Builder market so this would be
a way to kind of get back control of
that block content
and then if at all possible reducing
incentives from validators and block
Builders to work together
um is something else that I think is
important and following on from that
working on the ability to monitor the
Builder Market as a whole by putting
something in the protocol that can tell
whether blocks have been built locally
or not
so that's pretty much it thank you very
much for coming I'm wondering if there's
a method where some of these solutions
could be made by the community and be
somewhat attached to something like math
boost kind of almost like a module that
you can add if you opt in yeah
um I think I think that's a really great
idea uh I think it depends on the
solution math boost at the moment is a
fairly lightweight piece of software and
we have thought of these things a lot of
the things that we want to do with like
transaction lists and other things like
that require
knowledge of State of the ethereum State
on map boost just doesn't have that but
I think that there are definitely maybe
some other things and other ways that
mebus can be improved and
um you may have already seen we're also
trying to make math boost more of a kind
of community effort as well and take
Solutions and from from other other
parties yeah
hi Jolene thank you that was a great
talk just wondering the the um solution
where you allow Builders
um sorry validators to augment the block
doesn't that still require or still rely
on them being altruistic
like isn't there is there
is there a situation where it just
doesn't make sense because it's so much
more profitable and not much goes into
public Med pool perhaps yeah
um I I think I think you're completely
correct about that in terms of
incentives and I generally think that
it's it's really important for us to
kind of design these things in a way to
make sure that people aren't missing out
by doing things that are good for the
protocol
um so yeah but I I think
one maybe one example of where this has
actually worked well is around the time
of the merge uh when there were some was
there some problem with my Boost or
something and a lot of people said that
you know they weren't going to run math
boost so it was more kind of like a
social like altruistic thing so I think
ethereum is kind of special enough in
that um
it does happen that people have an
interest in in the protocol and want to
do the right thing by it but you're
completely correct yeah if it got to the
case where it's just not profitable to
augment your block we'll have to think
of something else