Hey Alex, thank you for providing this info here!
the impact so far is rather small. in feb ultra sound delivered 9,607 ETH in bids, and reduced bids by 55 ETH or 0.57%. March 6,266 delivered, 20 reduced or 0.32%. until last week, ultra sound has kept $0 for itself and returned 100% of superfluous bid value to builders.
Is it possible to specify how much of this specifically relates to the Lido protocol EL rewards vault (0x388C818CA8B9251b393131C08a736A67ccB19297)?
What are your plans with regards to when the delta (superfluous bid value) will begin to be split between the relay and builders, and how are you thinking of determining the split?
Additionally, for the community, I’d like to provide this resource from the ultrasound github for community members who may be wishing to dig into more details on this mechanism.
In general, I understand the need for relays to find ways to sustain their operations, and in principle this mechanism should not result in proposers receiving materially less payouts than they would otherwise (i.e. a builder could be “minimizing” their best bid continuously as to not overpay, but not all builders are able to do this as quickly as necessarily and “offloading” this work to a relay is both more effective and efficient (if the relay does its job properly)). In essence, it represents builders paying relays which have better latency a fee to utilize an “overbid minimization service”, so as long as it’s open, fair, and transparent, it can be benign.
That said, IMO there are a few important considerations here:
- this service should be available to any and all builders who wish to use it, and no “special terms” should be afforded to sub-sets of builders
- the service should be public and transparent in the sense that bids are adjusted based on public info, and not private info (i.e. the “original” and the “adjusted bid” should both be available, which it seems that they are via your data API).
- we must be cognizant of the possible centralizing effect here whereby if only a single relay offers this mechanism or does it way better than others, then builders will prefer this relay (or exclusive send their flow to this relay) which may lead to cartelization or relay monopoly (it doesn’t seem to be the case here, and if so there are things the protocol could do to shield itself, so it’s more-so something that needs to be monitored in case adjustment is needed)
In general, the world of PBS and relays moves really quickly, and can be difficult to follow, so it’s highly appreciated if and when relays make substantial operational changes (such as this) they are communicated to the DAO & community timely.
From a DAO and protocol perspective, I believe it’s important for stakers, the DAO, and the community to be able to easily discern when this happens, how often it happens, and how much total value has been “alternatively routed” in this fashion, so I will be working with the RMC and DAO contributors to see if/how this can be reflected in public tooling, such as the fees monitoring dashboard.