The business model of blockchain is the sale of blockspace, Ethereum blockspace is limited. There is a gas to determine who and what consumes that supply.
The gas is used to specify the amount a stakeholder is willing to pay for his own tx to be included in the chain. With EIP 1559 in the London Update, the block was divided into bacefee and tips, making the block dynamic. However, since the gasLimit in a block is fixed, the number of tx that can be included in a block due to fluctuations in the bace fee will vary depending on network demand.
History is littered with examples of increased volatility in commodity markets, and derivatives markets have helped reduce risk for producers and consumers, and can serve as a broad-based price discovery tool.
As mentioned in the article âOpportunities and Considerations of Ethereumâs Blockspace Futureâ here and in other prior cases and articles, the solution of blockspace futures has been discussed Manifold, Akimiya, and QI Protocol are actually discussing and developing solutions.
The Ethereum community has also started discussing credible commitments such as PEPC, and Slot auction (block space futures) and parallel auctions have been mentioned as examples of their application, which may increase the task of the Proposer. The main users would be sophisticated staking operators like you guys.
My question is whether Proposer really wants to express preferences in block construction by doing block space futures or taking on extra tasks. And what concerns do those who actually answer Yes/No to these questions consider?
I look forward to discussing this with the lido community.
I donât think that PEPC necessarily has to significantly increase the complexity/add extra tasks for the proposer. The key point is that proposers arenât obliged to fulfill these commitments themselves. For example, outsourcing an entire block is just one possibility, proposers could potentially outsource any of these commitments. Essentially, a proposer can specify their commitments, like saying âHere are the specific commitments Iâve opted into.â As long as builders are aware of these commitments, they can construct a block that aligns with them and then submit it to the proposer. Itâs crucial for builders to adhere to these conditions because failing to do so means their block wonât make it onto the chain and so they would be sad. This creates a similar incentive as the full block auction for builders i.e as long as theyâre informed about the proposerâs commitments, they can tailor their blocks accordingly. Thatâs why imo, with thoughtful design, this doesnât necessarily make things more complicated for the proposer.
Can you link this article please? I assume you mean the frontier.tech piece but not sure. And,
How do those projects, the authors of that blog post, or you () propose solutions/mitigants to some of the considerations Julian raises in Structuring Blockspace Derivatives?
Because it all sounds nice and great until there is a fee market manipulation incident that has dangerous, unforeseen impacts on the rest of the protocol.
Assuming proposers aim to maximize profits, if there are ways to express preferences that lead to more profits, then proposers will want to express their preferences. This is why PEPC forms an argument to be careful with the full-block PBS, like we have it now. It is not clear that PEPC can unlock more value but this at least seems plausible now.
Finding a preference to express that maximizes value could require sophistication, but maybe out-of-protocol solutions could pop up to fill that gap like mev-boost did.
Richer commitments in the form of slot auctions, PEPC or preconfirmations all imply that there is some assurance of actually getting your transaction on-chain, and thus some guarantee on settlement (and possibly execution quality).
Blockspace derivatives do not need this guarantee as some users may just want to hedge the base fee that they need to pay (they only care about congestion and not contention as much). These are very prone to manipulation.
The considerations on which proposers would want to express preferences are quite unknown as far as I know. For preconfirmations, it may be to increase profits for proposers. For blockspace derivatives that have base fee as underlying, proposers do not need to be the ones trading them and thus far we have not seen speculators/market makers willing to trade them.
Hey Julian.
(Link will be rejected. The âaâ is added to the beginning of the URL, so please remove it when you jump to the link.)
While being discussed such as Mev-boost+/++, PEPC-boost and PEPC-DVT as the potential solution to pop up to fill that gap. But Iâm currently considering a model named suave-boost that submits commitments(proposer-preference) on SUAVE.
As sam mentioned, as long as theyâre informed about the proposerâs commitments, they can tailor their blocks accordingly. SUAVE can build full block / partial block based on the proposerâs commitment. Or the proposer can make a commitment contingent on something happening on SUAVE.
Agreed. And the demand for transaction inclusion may outweigh the demand for transaction contention. [1] Importantly, the commitment for contention may facilitate Multi-block MEV, especially TWAP-based oracle operations, even if they are not validators.[2]
) propose solutions/mitigants to some of the considerations Julian raises in 
Great discussion!