Unlocking new validator yield with mev-commit through stETH

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Hello! I’m Drew Harding and I lead growth strategies for Primev, which is building mev-commit. Long time reader, first time poster :slight_smile: I’m excited to formally introduce the project to the Lido community and hear your feedback!

TL;DR

Primev introduces mev-commit, a novel network designed to play fast commitment games starting with preconfirmations, which have shown to enhance validator yield on the Holesky testnet. Validators are able to passively opt-in to mev-commit and contribute to network security using stETH. Key facts about mev-commit:

  • Chain-abstracted network for real-time bidding in encrypted mempools
  • Addresses coordination inefficiencies in transaction execution
  • Supports passive opt-in for validators, who may use stETH as collateral via restaking protocols such as Eigenlayer and Symbiotic
  • Early adoption on Holesky testnet with interest from Lido operators
  • Integration plans include mainnet staking contracts, stETH support, and Lido ETH staking UI integration

We’re seeking feedback from the greater Lido community as we continuously align mev-commit with Lido’s mission. With this post we are raising awareness and soliciting input on features to ensure mutual benefits and seamless integration.

Introduction

mev-commit is an innovative network designed that enhances validator yield through commitment games, e.g. preconfirmations. When validators passively opt-in, they simply gain bid revenue as extra value added to their blocks using their existing mev-boost sidecar. From the validators’ perspective, mev-commit bids act as another transaction source that adds value to blocks as it introduces new dimensions to transaction fee expression such as time. Validators may opt-in and use their own security collateral via staking ETH; native restaking; stETH restaking via Eigenlayer; or stETH restaking via Symbiotic.

mev-commit does NOT require validators to run any additional software, such as sidecars, but instead integrates upstream to mev-boost via block builders or relays to enhance the mev-boost pipeline.

What is mev-commit

  • Real-Time, Chain-Abstracted Network: mev-commit is a credible commitment network designed as a compatible layer on top of post-merge PBS infrastructure. It has undergone extensive testing on the Holesky testnet since Jan ‘24 and has passed a first round of audits for mainnet deployment.
  • Versatile Bidding Support: mev-commit supports sending bids for various execution or commitment use cases, with an initial focus on execution preconfirmations for Ethereum. It accommodates both leader-based and leaderless visions, reducing mechanism risk for participants.
  • Active Participation and Testing: Many validator groups are already opted into the network on its testnet, which can be tracked on Holesky contracts or the validator registry dashboard. Actors including MEV searchers, L2s, shared sequencers, and bridges are working on Proofs-of-Concept with mev-commit to test use cases and enhance their transaction UX.
  • Net-New Revenue Opportunities: Bids in mev-commit represent new revenue opportunities for validators, block builders, sequencers, and other mev actors. Holesky test data shows an average 2x increase in block value using mev-commit. Execution service providers commit to these bids and must deliver on their commitments, such as executing transactions in Ethereum blocks.

Context and background

Primev, the organization behind mev-commit, was founded in November 2022 following discussions with members of the Ethereum Foundation and Flashbots team at Devcon Bogota '22 in which we explored the benefits of a real-time coordination layer. Our team’s experience operating a block builder and relay laid the foundation for mev-commit, an open-source credible commitment network that addresses coordination inefficiencies in an increasingly decentralized and complex transaction execution landscape.

With mev-commit, communities like Lido can passively opt in to preconfirmations, described as the “next widely adopted validator service after mev-boost” (per Hasu’s ReGOOSE proposal). Some Lido operators have already expressed interest in mev-commit, which already has early adoption from validator groups on the Holesky testnet. Primev has seen recent demand from stETH holders, particularly those utilizing stETH to restake in Symbiotic, following our partnership announcement with Symbiotic. Additionally, Primev has published extensive research on preconfirmations and is building mev-commit in the open, with plans to grow the network with the community through a DAO structure.

How mev-commit benefits yield for Lido validators and increases utility for stETH holders

  • High bar for security practices
    • We prioritize security, rigorously testing mev-commit since the beginning of the year and engaging audit firms and independent security researchers for audits. Security reports will be made publicly available for mainnet.
  • Low-risk profile
    • We’ve aimed to avoid introducing additional risks to LDO token holders and stETH stakers. Our passive opt-in mechanism live and tested on Holesky eliminates middleware risk and designates mev-boost relays as referees for commitment games, ensuring net-new revenue reaches validators.
  • stETH adoption and interoperability
    • Encouraging the use of stETH as collateral to opt into mev-commit increases stETH utility to bring forward next-gen network features like preconfirmations, aligning with community values.
    • We plan to explore a multiplier model for stETH stakers in the protocol, incentivizing participation in the mev-commit ecosystem and vice-versa.
  • Philosophy-alignment and commitment to decentralization
    • As former block builders and relay operators, we have worked to mitigate censorship and centralization risks post-merge Ethereum. mev-commit is designed with this perspective, incorporating feedback from researchers. We aim to decentralize each network component with input and participation from early users and involved communities.
  • Increase validator yield
    • Primev has been championing preconfirmations for over a year in the ecosystem, and has pioneered a set of new mev-originating services through a sufficiently decentralized network. Primev is dedicated to growing the usage of these services and thus benefit participating validators in a continuous and growing manner as we have ecosystem participants build new commitment games and introduce them to the network.
    • Notably, mev-commit’s design avoids suboptimal decision making for validators, such as constraining block builders, which can lead to opportunity costs for validators. This leads to opted-in validators with little to no downside potentialwhile maximizing upside potential for net-new yield.
    • mev-commit is the only network that is able to provide execution preconfirmations by default, unlocking maximum revenue from preconfirmation bids as users are willing to pay extra for execution guarantees and avoid transaction reversion from being included but not executed.

Getting mev-commit Lido-ready

Primev is enacting the below tasks based on early feedback from the Lido community. Our goal is to integrate mev-commit for a seamless interaction with the Lido community:

  1. Employ mainnet staking contracts:

    This approach mitigates bridging or chain-related risks considering the large amounts staked, relying primarily on Ethereum security to passively opt-in to mev-commit.

  2. Support stETH as a staking asset

    Leveraging DeFi’s composability, this integration aligns both ecosystems and increases the utility of stETH for gaining additional yield from commitment games. As the Lido community benefits from these games, we will explore additional partnership opportunities to enhance incentives for staking stETH as an opt-in method.

  3. Integrate Lido ETH staking into mev-commit’s validator dashboard UI

    This includes supporting stETH and other related actions based on feedback, ensuring a seamless and user-friendly experience for validators opting into mev-commit. This will give mev-commit opted-in validators an opportunity to accept stETH from the community as collateral, and stETH holders to participate in securing mev-commit and benefit from preconfirmations.

  4. Launch a Validator Insurance Pool to enhance low risk profile of participation

    Primev is in the process of launching a 100 ETH Validator Insurance Pool on mainnet to reimburse validators for any potential hazards resulting from opting in to mev-commit. While we don’t anticipate validators to experience any losses at all from opting in, having an extra Insurance Pool that covers multitudes of ETH value of the average block further enhances the low risk profile of opting into mev-commit.

Lido community feedback

We’re enabling the adoption of mev-commit by Lido validators and stETH holders as a means of increasing yield and enhancing network security through sharing revenue streams unlocked by mev-commit’s innovative commitment games. This provides stETH holders with additional utility and validators with new revenue streams that can be opted into with minimal risk.

We invite Lido operators to learn more about the value unlocked through mev-commit’s preconfirmation mechanism during the Holesky testnet phase and mainnet transition. Given the development for stETH support is complete at the contract level and dashboard support will be released soon, feedback at this stage will help us ensure we meet Lido community requirements and preferences prior to mainnet launch.

We are open to collaborating with the Lido community to develop incentive models that reward stETH holders for participating in mev-commit. This could include a multiplier model or other mechanisms that align with Lido’s existing rewards structure. We encourage Lido operators and community members to share thoughts on how we can enhance integration, improve user experience, and align our network with Lido’s mission of decentralization and security.

Thanks!

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