Lido on Ethereum: Relay Voting Proposal

I think a difference of opinion here is whether or not there could exist a censorship-free mev-boost space without crLists. I think “yes”, the current policy implies “no”.

I don’t think censorship-free is technically possible without fully encrypted transactions/mempool (or shutterizing them / etc). Even crLists do not guarantee censorship-freeness (e.g. a transaction may be delayed long enough before it’s picked up in the crList as to fail/revert/etc and thus be considered censored). Given that operators are asked to connect to as many of the “must include” relays as possible and given that the best block bid wins out and given that best bids could come from any of the connected relays, it is possible that the same level of actual on-chain censorship in MEV-boost space could exist without crLists as with. Once again – the issue is possible censorship at the builder level, not the relay level. If an operator is connected to all relays and the best builders don’t censor, there won’t be censoring.

“Non-censoring relays” are a misnomer. These relays provide no assurances about whether the blocks that they relay are censorful or not – just that the relay itself doesn’t care. In fact we could have censoring blocks being sent by “non censoring” relays and no one would be the wiser because the tools to assess actual censorship on the network currently do not exist (though some are trying to build them and IMHO I do not see any reason to not support this effort). Using “non censoring” relays and thinking we’ve accomplished something without actually assessing the practical effects and just saying “well, technically it’s probably less censorious” is performative.

This is a new relay with a single builder that is non-censoring (source) and competitive with Flashbots for profitability (source). I would argue that an operator wanting to use a non-censoring list of relays like Relayoor + BloxRoute MaxProfit + Manifold should be allowed to do that, and will end up censoring less transactions than an operator using the must-use relay list (which will fallback to Flashbots most of the time).

Relayooor has been contacted since day 1 to sign up to the Lido on Ethereum: Call for Relay Providers and they haven’t. I understand from their side why they probably want to take it slow before taking on the traffic and responsibility that Lido NOs may bring (although obviously there’s no reason to not do slow rollouts at a pace they would be comfortable with), but given that they are an anon relay I think it’s important that they show up here, represent themselves, and put themselves forward.
IMO it is not reasonable for someone else to take on the responsibility and accountability of this given the trust assumptions engendered by how MEV Boost currently works – but actually someone, anyone, can. Anyone can propose an addition to the “allow list” – so if e.g. you want to do that and the DAO signs off on it (which I don’t see an issue with personally given that it’s up to NOs to use) then it could be used, but the onus is on NOs there to (a) do the work and (b) stand by the their choices.

Not only is the alternate list less censorious, but it could also be more profitable!

If all you’re doing is adding/removing flashbots from the configuration, then I don’t get how it would be more profitable, since the most profitable block would be included regardless. At best it would be “as profitable”.

To summarise; I’m in favour of abolishing the must-use list and allowing all operators to choose their own list of relays. This gives operators the flexibility to adopt new relays as they emerge, or drop ones that are malfunctioning or found to be untrustworthy. It allows operators to favour non-censoring relays if they believe that to be an effective strategy, without a decision being made on their behalf by the Lido DAO.

This causes way too many possible issues due to trust assumptions and moves away from the goal: get as close to enshrined PBS as possible, so we can actually figure out what that’s going to do to the network. Right now reactions re: “look how censored the network is” are hyperbolic and basically wrong (see some work Rated has started doing on https://twitter.com/eliasimos/status/1580272373516812288?s=20) .

It allows operators to favour non-censoring relays if they believe that to be an effective strategy, without a decision being made on their behalf by the Lido DAO.

A protocol like Lido needs to be able to strike a balance between doing what’s best for stakers (which includes not making the underlying network worse), managing those risks, giving NOs enough leeway to operate the way they need to given legal realities and their organizational ethos (which I honestly believe this policy allows for), and operate within the technical limitations of the underlying protocol. If e.g. triggerable exits existed on Ethereum (or even just plain withdrawals), where stake could be reallocated between NOs more easily, I can definitely see empowering NOs to make these decisions on their own because then the protocol has recourse if the decisions the NO makes end up being bad. However, in the current system, this is not possible, so the policy has to account for that.

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