Flashbots introduces SUAVE, Shandong testnet & more - The Daily Gwei Refuel #469 - Ethereum Updates

Transcript

hello everyone and welcome to another episode of The Daily gray refuel where we got the latest news in ethereum ecosystem I'm your host Anthony 17th of October 2022. alright everyone let's get into it so we all know there is an issue of censorship on ethereum uh lately I guess over the last few or a couple months couple months I think at this point and we all know it's a very nuanced discussion but unfortunately on the Twitter sphere on Reddit and Discord and social media in general people don't like to take a nuanced approach to things especially not on Twitter I don't want to get bogged down too much in the details because I've gone through them on the refill before but the reason why I'm bringing it up again today is because over the weekend the conversations I guess got more and uh more uh uh common on Twitter and I was

like okay well I need to address this on the refuel well what else I wanted to address was something out of the flashbots team now for those of you who don't know flashbots is responsible for most of the censorship happening on ethereum right now given that their MAV boost relayer is the most used one by far I believe it's used by 80 so processes about 80 of blocks um so it and all those uh sorry 80 of Mev boost blocks I should say not all blocks uh and that's sensor censoring tornado cash transactions uh because they want to be caught on quote of fat compliant which is a whole another kettle of fish I'm not going to get into today but the reason I bring up flashbots is because hazuhia who is a strategy lead at flashbots uh put out this Twitter thread announcing Suave

which is the next step for flashbot so Suave stands for the single unifying action for Value expression it's an Mev aware encrypted mempool for users and wallets it enables Progressive decentralization and is a turnkey decentralized block build up for Roll-Ups so this is essentially I guess the next step in Flash boss's developments uh life cycle I guess you could call this flashbots 2.0 um and I've delineated between those before I guess like it would be called technically Mev Boost 2.0 but that's a bit of a silly name so it's called Suave which I mean maybe is a bit silly as well but I've delineated between these before flash the company that develops the Mev boost software and anyone can run relays that talk to that software

and flashbots runs one uh blocks route once runs a few there's other companies that run some but essentially Suave is meant to be a fully decentralized block Builder uh fully open source with open development 8th native evm compatible optimal user execution harnessing Mev full compatibility with flashbots today cross slash multi-chain support maximizes competition and Geographic diversity enabling open order flow for ethereum's future and programmable privacy so this I guess is flashbots's answer to the fact that there is censorship at the I guess transaction inclusion level and it's also their answer to their own censorship that they're engaging in due to being a us-based company now when I look at this I think of two main things

one token maybe uh you know whenever someone says decentralized protocol or decent Progressive decentralization I think of token now I don't know if there's going to be a token here as I've said before I don't know if it really makes sense for there to be a token for this considering that we're going to enshrine Mev boost in the protocol through PBS we don't know when that's going to happen but that's the goal right so it would basically make uh I guess Mev boost as a piece of software redundant right and uh because it'll be in protocol there wouldn't need to be a token tied to it but yeah you know there could still be a token coming out of this I believe flashbots is VC funded so there's that incentive as well to do a token but I don't know if there's going to be a token or not that's just my pure

I guess uh speculation there but the other main thing that Springs to mind here is that flashbot is obviously very very aware of their position here they're very aware of the censorship going on and I don't believe that they actually want to be in a position where they have to do this so that's why they're trying to decentralize out this relay infrastructure as much as possible at least that's what that's one of the reasons why I believe now if they're able to do this and if they're able to do an encrypted mempool well that would be like that shutterized Beacon chain that I spoke about a few weeks ago where when the transactions are submitted to the network you wouldn't actually be able to see the contents of the transaction right you wouldn't be able to see if it contained a tornado cash

transaction or if it's a uni swap transaction all you would be able to see was the necessary information that you would need to extract a potential Mev from it now I don't know exactly how that works under the hood but if it works the way I'm thinking about it with uh which is the shutterized speaking chain it means that there would be plausible deniability so the relayers could basically say to any Regulators that ask them well we don't know what Transaction what the transactions are until they're actually included in a block now that would prevent inclusion censorship that wouldn't prevent uh a testation level censorship and I've delineated between these two before and it's very very important that these two get separated out because inclusion censorship is basically block Builders or validators which can be block

Builders uh which are block Builders but block Builders can't be validated which is another important thing that I'm going to get into is I'm trying not to go into a million different parts here but this is a big thing as I said lots of nuance but the um the inclusion level censorship can happen and anyone can do it right I could do that I could say well I'm not going to include these transactions on my on my uh on my validator and basically exclude them like if every validator has the power to do this right um that is less bad than attestation level censorship now the thing about attestation level censorship though is that it's a it's more nuanced than inclusion censorship because the wave ethereum proof of stake protocol works is that okay well I'm going to try and simplify this every validator is going

to attest to blocks right uh and and then not every validator is going to produce a block every time a block gets produced like I'm trying to explain this as best I can but essentially there are there's a splitting of kind of uh I guess uh tasks there right whereas with and that's the way you build on or you guys I guess attest to the canonical chain whereas with Bitcoin it's different like ethereum proof of stake uses something called Gaspar Bitcoin uses a Nakamoto consensus so they're different things and that's how we come to consensus on things um but when it comes to attestation level censorship what it would require it would require the validators to not attest to the blocks that are being produced by the rest of the network so say I don't know 20 of the network says well I don't want to attest to the

blocks that the other 80 are producing what that's going to do is that that's going to result in a fork that 20 is going to end up on their own Fork now that fork is not going to be the real ethereum they're going to start getting bled out with the inactivity leak on that real ethereum which is where the other 80 are and on top of that the other 80 can in connect social slashing to slash that twenty percent that has decided to not attest to blocks because they're censoring uh oh they know for any reason but let's just say we know it's because they're trying to censor things so there are in protocols things there it becomes uh I guess an issue when it's a large part of the network 20 is a large part but I'm talking like the 33 threshold and then maybe even the

finality threshold which is at 66 but we're not seeing that at all like as far as I know and as far as I've seen as far as anyone has seen there has not been a single instance of attestation level censorship it's all at the inclusion level which is actually really good because the inclusion level we don't have to enact social slashing at that level and it's actually not productive to enact social slashing at that level unless it got really bad where say for example 50 of blocks were censoring unisop transactions well that's going to lead to a massive degradation in performance of the overall Network for users we would probably enact it then but the whole point is to basically take that power away from block Builders and from from validators and from relays which are block Builders and basically

say that well okay you can have plausible deniability because you don't actually know what those transactions are or we can just remove the ability for you to uh choose what transactions are included in a block and which ones aren't all together so that all of them get included as long as they pay the correct fee right that's how it should work in in in reality um so there's that then the other thing is a discussion that was being had on the Discord Channel around the difference between like a validator and a block Builder so a validator like a 32-eighth validator right that can be a block Builder and it is a block Builder they're you know whenever you propose a block every so often it's not going to be every day maybe it's not going to be every month but it's going to be every

so often you're pretty much guaranteed to propose a block at least a couple times a year right as a single validator um so you're a block builder in that sense but there are other block Builders right such as these relays so the flashbot to relay the blocks route relays these are block Builders but they're not validators they don't actually exist as validator entities on the network they take in inputs right from uh they take in transaction inputs then they spit out to these transaction inputs to validators that propose the block that's why you don't see a relayer being a block proposer it'll be like a Lido or a coinbase or a binance right but those Services I mean Lido does use flashbots as a relayer so they're only

being fed what flashbots feeds them not and they're not actually taking in uh transactions uh from from elsewhere I mean I mean they are but like you get what I'm saying right like for the percentage of blocks that contain those transactions and don't contain the other transactions that's what's getting fed in there so that means that a relay cannot do attestation level censorship because it is not a it's not a validator so there was a thing the other day I think Martin koppelman said this on Twitter that 51 of blocks on ethereum uh are censored because they're running through uh the these censored relays like okay yes but that's inclusion level censorship that does not apply to a testation level censorship because all the validators that are using that mbv

boost software right they're not themselves engaging in that censorship directly they're basically Outsourcing that to these relays so if those relays didn't and as I said those relays aren't validated so if validators wanted to do attestation level censorship they would have to do that themselves and they're not going to be able to do that through flashbots's relay or another Mev boost Relay For example so there's a very very important distinction there that I think a lot of people miss and the reason why they miss it is because a lot of people still think of blockchains in this one-dimensional term uh one one-dimensional thinking of Nakamoto consensus which is what Bitcoin users wear you know the the pools or the miners will produce a block every so often and they'll build on the same chain but they're not attesting to

blocks miners don't attest to blocks they just build or attempt to build blocks right on the uh that that chain on that canonical chain using Nakamoto consensus whereas Improvement stack ethereum there's no notion of that it's different the universe validators are required to attest to those blocks to make sure that they're all on the same chain so they're all on the conical chain and that there is the key difference between the two and that's why you can't even really compare the two when it comes to this sorts of stuff that I mean that's a that's one reason there's a million different reasons there but yeah so I just wanted to give that breakdown now I know I rambled on a bit there but it's very important to understand the Nuance here you cannot have a good discussion about this without without understanding the Nuance so there's that and I'm excited to see

what Suave actually is and we know what it come uh when the software actually comes out how people use it how it actually helps with censorship at this point it's all talk like I haven't seen anything yet I'm not sure if any code is open source or anything so it's all talk right now but I do believe the flashbots team are good actors I don't believe that they would be doing the censorship stuff if they didn't have to I do still have a question mark around like why they're still running their relayer um but there are possible explanations for that one is a I guess a conspiracy theory that they're running their relayer and since answering to push the ecosystem to work towards censorship resistance much faster than what they are maybe that's not as conspiracy theory as I think it is but you know

it's still not I mean it's just conjecture right like there's no real proof behind that the second reason is that they don't actually believe any of the other relays are stable enough to take on their load from flashbots which is kind of legit because there's been more bugs in the other relays than there has been in flashbots so I see that line of reasoning um but honestly yeah I mean I I still personally believe that they should shut it down but maybe this is their way of shutting it down by decentralizing it but basically saying well we're not running the relay anymore it's run by the community like the flashbots really it's run by the community I'm not sure how they're going to approach this but cool to say that they've actually been working on it and there's actually a solution here or just one of the

solutions to the many that are coming now in saying that I put out a tweet over the weekend where I said ethereum protocol upgrades in order of importance over the next six to 12 months that's the key there the time frame over the next six to 12 months Beacon chain withdrawals I believe to be the most important upgrade like in the in the short to medium term nothing else is is as important as that for all the reasons I've outlined previously secondly would be the PBS CR lists and related censorship resistant upgrades as I said PBS is not coming in the next six to 12 months from what I've seen see our lists we can do an implementation of them without PBS which people are actually working on right now people being core devs and related censorship resistant upgrades like the better relay infrastructure uh the shutterized beacon

chain stuff right that sort of stuff that's what I'm talking about there and then I put third Proto dank sharding or eip4844 and I said just my humble opinion censorship resistance is more important than scaling right now now I know I've gone on about 4844 Protank charting a lot I know I've said I'm super excited about it that it's super important and it is but it's more of a kind of thing of what would I rather have a censorship resistant ethereum or a more censorship resistant ethereum um or more scale in the in the next 12 months well I mean it's pretty easy for me to choose a more sensitive resistant ethereum because I truly believe that the only thing different initiating blockchains from a centralized database is censorship resistance that's the only thing at the core of it that is the the whole purpose of these things it's the

whole reason why we use incredibly slow versions of databases instead of just using a centralized database that is the entire point and also on that note I forgot to mention this before the thing about censorship inclusion censorship as well is what you need to understand is that even though 50 of blocks uh would um are censoring because of the 50 of all blocks are censoring that just means you have to wait an extra block to get your transaction in so in reality no one's really being censored right what's happened is you're having delayed transaction inclusion so instead of getting your transaction included well you have a 50 50 chance of getting your transaction included in one block 50 50 chance of including the next block and the next block but obviously you know

given the laws of probability uh you you because you've always got that 50 50 chance um thinking about probabilities gets funny here I know someone told me off for this a few years ago but you see what I'm saying there like there is a a higher and higher percent chance never 100 but a higher 100 chance the more blocks go on for you to get your transaction in so a worst case scenario you wait a few blocks your transaction gets in practically you aren't really censored but that's not good enough because like it's ternado cash transactions today it can be anything else tomorrow we need to it's we need to essentially remove the ability for Block Builders and validators to uh include or not include what transactions they want they should only be a they should only be able to uh or a transaction should be

should be ordered based on fee like the fee market right the fees that they pay and everything like that so just wanted to mention that one but as I said I believe that censorship resistance is the key thing that separates us from the Wolves so to speak from the animals right of centralization um and because of that I think we can wait a bit longer for scale if we need to it seems that 4844 is a little bit more complex than previously thought I don't know how long it's going to take I know there's already devnets and things like that so it could actually happen open at the same time I'm not saying that we should delay anything all this stuff's being worked on in parallel anyway I was just ranking this in terms of importance at least in my opinion like you can have different opinions to

me it's fine but I don't believe that uh we aren't working on all this in parallel either like it's not like people are saying well we're only going to work on proto-dang shining right now forget about the other stuff no I mean there's different people working on different things obviously the uh flashbots team and everyone running relays and doing mov stuff is trying their hardest to to essentially fix this issue on top of that core devs are also doing it as I said there already are limited implementations or code of things like CR lists already out there and I'm seeing a lot of good signals around that but that was just my humble opinion uh there on that one but uh last up here I think this is last up on the um yeah last up on the on the extensorship drama anti-present that

says put out a good tweet before where he said you know flashbots holds their censoring relay tomorrow should we really declare that a victory and Auntie says I'd say no real victories implementing PBS CR list and all shutterized Beacon chain stake is pointing their nodes away from censoring relays while remaining at least as profitable I totally agree with this I think that shutting down the relay is just a Band-Aid solution that doesn't prevent anything what if another relay spins up and they don't listen to shut it down I wonder if they're actually like well we want to I don't know attack ethereum we want to discredit ethereum let's send let's spin up a censoring relay so we can't rely on that social AR is is fine to call out this stuff to draw attention to it obviously we have websites like Mev watch as well which

help with this but it shouldn't be relied upon over Technical Solutions they have to work in tandem if we can get those Technical Solutions deployed we should get them deployed and we should do we should it's still being still continue being loud about this issue um but just being loud about it isn't going to fix it in the long run it's going to uh put eyeballs on it to implement the Technical Solutions to fix it that's what being loud about it does and also it puts eyeballs on it for sneakers to potentially or steak is using Mev boost to potentially change which relay they are using right it's kind of disappointing right now that so many of them are still using flashbots but I guess it's to be expected since their profit Maximus maximalist a lot of the a lot of the value is on the network

not everyone is an altruistic validator and just because someone is a solo validator doesn't mean they're an ultra is to validated either and I don't blame them for this it's up to us to engineer the protocol in such a way that it becomes more sensitive resistant in the face of these perverse not perverse just in the face of these incentives right perverse from our view as censorship resistant maximalists not perverse from the Network's point of view because that's just essentially what the network allows you to do and last up just a comment on everything that happened I guess over the last few days around the censorship stuff I said you know even though it causes lots of drama and flood defense star I love the ethereum communities radically transparent approach to discussing issues sweeping things under the rug doesn't Advance the ethereum mission nor does it fix

anything ethereans are built different I am so happy that we don't sip under things under the rug like other communities do this needs to be discussed out in the open it doesn't matter how many Bitcoin maximalists call ethereum a Fed chain how many people fight it how many people say ethereum has failed I don't give a what they say we know that there are solutions uh out there we know that there's Solutions coming they're being worked on we know the Nuance behind it if you're a refuel listener and Watcher I'm pretty sure at this point you've heard me ramble on about it enough you know that this is a nuanced topic here this is not something that uh you can look at as a black or white thing uh but yeah I just that was the last thing on that one moving on to the next bit of news which is actually

pretty positive so the EF JavaScript team announced the launch of an early pre-shanghai test net that they are calling Shandong so you can go to shandong.evops dot IO to check this out so this is an experimental test net running cooperation with ef devops which activates a set of selected Shanghai considered eips for early client testing you can see the list of eips right here which uh it does it doesn't include I don't know if it includes Proto dank sharding or anything it includes a bunch of other ones that are more things that you know and I mean the only really the only ones that are you the only one you'll probably recognize from this list is the beacon chain withdrawals but you can go check this out on the GitHub as well but this is really cool I love this uh Shanghai for those of you who don't

know is the first upgrade scheduled after are the merge the one that we're expecting to go live uh I guess like early-ish next year like first half of next year um but it's cool to say that we have an experimental test net running already for for this which is very very uh very very awesome so you can go check out this thread as well I'll link it in the YouTube description below all right so Mario CR who works as a developer at the at Geth uh put out a tweet saying you know just finished drafting eight slash 69 a modification of the eve protocol to allow for withdrawals I don't have access to my GitHub account in Bogota we'll create the Erp once I'm back home also drafted e-68 for 48 44 two days ago remember I said after the merge that these people will be taking these people being the

core developers will be taking some time off uh and enjoying Bogota well I'm sure they enjoyed Bogota but they're not taking any time off they're still working on this sorts of stuff and I think that they really do feel the urgency around withdrawals um in particular because of the fact that we have a theory we don't know if it's actually going to play out like this in practice but we have a theory that once withdrawals are enabled well at least I have a theory that once withdrawals are enabled we're going to see this great reshuffling of steak I like again like I want to stress that it's a theory guys it is not something that you can say will happen with certainty like withdrawals could be enabled and it could actually make things worse like there's always that possibility right but I do believe that with drawers being

enabled will make things better I know right now people are saying well you can just exit your steth position if you want to by selling into the liquidity pool and getting Ethan going somewhere else like yeah you can do that to an extent it depends how much stf you have because that liquidity pool uh doesn't have unlimited liquidity right it only has a certain amount that you can take out and then and then it starts to go under the I guess it's not a peg right but it starts to go under you know the one to one eth again and it starts to to have a discount again so and also when you sell your STD it's not actually withdrawing from from Lido so lighter's dominance is not going down because people sell their steth right so when I look at it like that especially when it

comes to whales and big players who don't want to take any haircut like even a five percent haircut for them is huge right if you have like 10 million dollars in staking a five percent haircut is is nothing discovered that's half a million dollars right you're not going to take that if you can avoid it if you can just wait an extra few months while you're still staking until you can actually take the from the bacon chain itself and then restake it so I think there are people like that definitely um and there are people taking the centralized exchanges that can't exit at all because I don't think binance has a token that lets you exit obviously coinbase does now but that's still at a discount I believe I think I haven't checked it lately but I believe CBE actually I'm going to look it up right

now just so I aren't spreading this information here um CBE is still at a discount it's not that big of a discount it's about three percent ish of a discount but that's still a lot right imagine taking a three percent haircut a minimum as a whale then you have to account for Price slippage on that liquidity pool which would be huge for a 10 million dollar uh Dollar sell so when you think about it it's again at the five plus percent Mark so I don't know anyone's that that's saying that would take a half a million dollar haircut just to improve the decentralization of the beacon chain when they know that withdrawals are coming relatively soon anyway so when I look at it like that I think okay well I I do think we're going to see some nice reshuffling post withdrawals but it's hard to tell where it's going to come

from exactly all right so should I feel shared this little slide here from which which he captioned with great overview of the differences between proto-dank sharding sharding from the EF Devcon Workshop so you can see here that on the left hand side is Proto dank sharding which is erp4844 which introduces a one-dimensional kzg scheme which I've talked about before that kgz ceremony that we're going to be uh seeing spun up and a blob sidecar and those blobs are basically those things that I've talked about where layer 2's can shove their um their data there and then they expire after after a month I believe uh and that allows us to do more more transaction through sorry the add more scalability on layer twos uh and then dangshiding on the right is like the

full thing right you've got the two-dimensional kzg scheme uh sharded data so proper sharding proposal Builder separation right PBS and data availability sampling uh or Das and then what's common between these two is the kcg commitments blob transactions Point evaluation pre-compile and I'm going to begin to try and understand what that values and a fee Market of course so it's a good little table that just shows the differences between them and what's common between them um and yeah I don't even think like uh erp44 should even be called sharding at all from from what I can see like I mean it's called Proto dank sharding but like it's it's not really shining charting is coming with dang shining and again sharding is is something that's gone through so many Evolutions over the years I think people are very confused

about what it is this is data sharding this is not execution sharding which means this only applies to layer 2s as I've explained plenty of times before but I I just thought this was like a cool little comparison chart I'll link it in the description you can go Google these things if you want to all right so Zappa here has integrated nfts on arbitrim so they did this for optimism a little while ago and now they've done arbitrim so they're covering two of the biggest Layer Two ecosystems uh which is great to see so if you're a zapper user you can now track all your nfts and interact with all your nfts on arbitrim and arbitromatic actually has a pretty solid nft ecosystem from what I've seen I I see it in on on Twitter sometimes people uh talking about these nfts like small I

think is one is a really popular one uh or small brains that's what it's called yeah yeah yeah and a bunch of other ones out there and especially I mean I'm surprised Odyssey hasn't been turned on yet but I'm expecting it to be turned on soon-ish maybe maybe they're gonna do a Christmas thing I don't know I mean we're still pretty far from Christmas but who knows right um but yeah there was nfts part of that and that was a big center point of it so maybe once it gets turned back on you'll be able to use Zappa to track all of that as well which would be very very cool all right finally here I just wanted to give a shout out to cryptocurrency jobs which turned five last week so I guess happy birthday to them happy fifth birthday to them uh and as part of this

Milestone uh Daniel one uh reflected on how and why cryptocurrency jobs came to be what's changed over the years and shares what's next the big announcement from this is that uh Pantera uh one of the longest running funds in the crypto ecosystem has partnered up with cryptocurrency jobs which is which is really really awesome I think the the number one reason why I think this is awesome is because Pantera obviously has a lot of um portfolio companies cryptocurrency jobs as a website helps people find jobs in crypto so there's like a really nice marriage there and as I said Pantera has been around for a very long time since 2013 one of the longest funds in this space they know a thing or two about crypto right then they and they have a large portfolio so I'm really excited for for Daniel and I

gave him my congrats uh privately um uh on this because he's worked so hard on cryptocurrency jobs over the years you guys know I'm good friends with him uh I I've met him in real life and everything and and we we chat from time to time but yeah he just worked so hard on this website for for for a while now and the thing is he doesn't just run the website for those of you who have interacted with him he actually helps you find a job and helps you not only find the job but also figure out what you actually want to do where you fit uh what roles are available all that sorts of stuff and he's just awesome honestly like I love the way he runs this I love that it's not like super monetized where it's just in your face with crap and

it's not like just a meat grinder of bringing people in you know get them into jobs that they don't really care about the collect the fee there's there's none of that right there's just like here's jobs you know if you need more help you know you've got access to to Daniel he'll help you uh and now he's partnering with Pantera to help their portfolio companies which I think is just absolutely awesome so congrats again to uh Pantera and cryptocurrency jobs uh and Daniel of course and uh yeah happy birthday for for turning five there but on that note that's going to be it for today so thank everyone for listening and watching be sure to subscribe to the channel if you you haven't yet give it a thumbs up subscribe to newsletter join the Discord Channel and I'll catch you all tomorrow thanks everyone