[PERCH] ETHGas
Realtime Proposer Commitments and Price Discovery
This post is in response to:
- [ Proposal ] PERCH: Protocol Evaluation and Request Coordination Hub, and
- Auxiliary Proposer Mechanisms
ETHGas TLDR
Background: In many discussions on Preconfirmations, the topic of “what is the right price?” comes up repeatedly. Validators broadly, don’t have the resources, information or knowledge on how to price these, and Traders aren’t willing to share information. Preconfirmations and other blockspace products by their very nature suffer from information asymmetry where the Commitment Buyers (e.g. Traders) have greater access to orderflow and realtime market information, and the Commitment Sellers (e.g. Validators) do not. This asymmetry and lack of realtime price discovery leads to a dysfunctional marketplace rife with economic rents where the Buyers take repeated advantage of the Sellers (i.e. Validators).
When transactions are private and negotiated in dark rooms this opens up commitment markets to collusion and off-market transactions which invariably lead to Validators suffering.
ETHGas is designed specifically to counter the above issues, operating as a realtime, open marketplace, where blockspace commitments can be traded providing accurate price discovery and fairness to all market participants.
Key points:
- Broad Product Suite: The product suite includes Inclusion Preconfirmations, Execution Preconfirmations, Sequencing Rights, and more, enabling Validators to maximize their rewards
- Lower Cost of Capital: Blockspace products may be bought and sold - that is, once a commitment is bought, it may be sold moments later, ensuring a lower cost-of-capital for the buyer, and therefore conferring a higher purchase price
- Futures Market: Commitments are sold up to 64 slots in advance, with plans for blockspace commitments much further into the future
- Latency: between 3-5ms (co-located)
- Technical Uplift: Minimal. No new sidecar - relying on Commit-Boost, which is compatible with and has a fallback to PBS
- Collateral: Validators can post ETH or stETH as collateral
- Secondary Market Rewards: ETHGas shares a majority of fees from secondary market activity back to Proposers enabling NOs and Validators to capture value from volatility
- Future Products: The marketplace and product suite is designed by extension so that the Base Fee may also be traded enabling Gas to be stored/transferred thus opening up a zero volatility gas experience for all users-alike
To view the marketplace, visit: https://app.ethgas.com and for further background material,read our “Introducing ETHGas and Realtime Proposer Commitments to the Lido Community” post.
PERCH Expectations
Number of Participants
We look to eventually onboard all Lido Operators. In the Testnet, we are eager to work with a diverse group in an effort to discover, and share edge cases with the broader community.
Within a mainnet environment, there are APY network effects, such that the more Operators that join, the higher the APYs will be for all.
Application Form
We encourage all Node Operators to register with us through this form and join our Proposers Telegram group accordingly.
Testing Outline
We are currently testing on Holesky with a broad set of Operators, with Mainnet just over the horizon. We have provided a few resources for NOs accordingly to get up to speed:
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Read our Validator Docs: docs.ethgas.com
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Sign up using our Commit-Boost module on Github
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Reach out to us as needed
In providing collateral, Validators may:
- Post ETH, stETH, and other tokens as collateral directly within the Collateral Contract, or
- Provide security through Eigenlayer or Symbiotic (forthcoming)
The ETHGas marketplace is generally off-the-shelf, with no required interactions beyond the above. For those NOs with an interest and capability to professionally manage the selling of blockspace, they may optionally, and additionally connect to the exchange via our robust set of APIs
Alignment with Ethereum Roadmap
- ETHGas enables Ethereum to provide the lowest-latency experience across all major L1s. Alongside broad decentralization, this is the Ethereum of the Future, available today.
- The ETHGas marketplace seeks to mitigate collusion between Commitment Buyers, and Commitment Sellers, whilst maximising utility for both parties
- ETHGas enables the full stack of Gas (i.e. Base Fee + Commitments) to be fully hedged, enabling Gas to more easily be abstracted into the background where Protocols can buy/hedge gas on behalf of end-users. This is designed to be compatible with current and forthcoming account abstraction approaches, with the ultimate goal being to eliminate Gas (at the discretion of the user) from the end-user experience altogether, and relegated to the background.
- EHTGas is compatible with the current PBS pipeline
- Further discussion on open sourcing and putting ETHGas into a TEE is available here
Neutrality
- ETHGas enables anyone to purchase sequencing rights, and preconfirmations disrupting the oligopoly of builders that currently build blocks. In doing so, we reduce reliance on specific builders, and increase overall rewards to Validators
- ETHGas is furthermore unopinionated with respect to builders or relays
Adherence to Community Standards
- ETHGas is compatible with the current PBS pipeline, MEV-Boost, the neutral sidecar Commit-Boost, supporting both Eigenlayer and Symbiotic (in testing)
- ETHGas has presented on the Sequencing Calls, participated in the Preconf Mainnet POC (link here), and is a one of the contributors to the Preconf API Specifications initiative (link here)
Security Best Practices
- The team have an extensive background in building large-scale enterprise cloud infrastructure, and within the Financial Services sector where security is paramount. Both of these arenas require a daily working knowledge of OWASP, ISO27001, and a number of related security controls and processes.
- Our smart contracts are furthermore audited by Sigma Prime (who also audited Eigenlayer, and Commit-Boost), with reports to be made public shortly.
- ETHGas has also been Live on Holesky since early November
Complementary Use Cases
- ETHGas is designed specifically to unlock a suite of other use cases, from Base Fee hedging, to longer-term gas hedging contracts, and abstracting Gas fees away from the broader general user-experience.
- With longer-dated hedging contracts across both Base Fees and Commitments, this unlocks Fixed Rate Staking, and sets the basis for the first crypto-native yield curve, elevating Ethereum to a #WorldEconomy from its current #WorldComputer moniker
We look forward to working with the Lido community of NOs to accelerate Ethereum and enhance the overall user experience. Please visit us at www.ethgas.com, or reach out to us via this form, on Twitter, or on Telegram.