[yuan43]

> Therefore, block producers and searchers require complex systems similar to those of a sophisticated trading house, like Alameda Research or Jump for example. This can therefore result in significant centralisation pressures for block producers, with smaller less sophisticated block producers being unable to compete.

I want to make sure I have this straight. The "therefore" in this paragraph refers to how miners "require" a way to front-run orders, bets, and other transactions made on the network lest they fall behind their peers in the mining arms race. The article calls this "Miner Extractable Value" or MEV.

So the centralization pressure from Flashbot comes from miners front-running "DeFi" (decentralized finance) players.

> The Flashbots system is integrated into the current Proof of Work (PoW) mining system on Ethereum. When the Merge happens and PoW mining is switched off, Flashbots adoption will reset to zero again. In order to mitigate against the MEV problem a new Flashbots infrastructure will need to be built up and staking agents will need to adopt this new system. This was not in the ETH 2.0 roadmap and may be an additional complication related to the upgrade to ETH 2.0.

This part is not as clear. How does the MEV landscape change in post-merge Ethereum?

[latchkey]

> How does the MEV landscape change in post-merge Ethereum?

The way that transactions are bundled is no longer done by mining pools and block construction has the ability to be outsourced. I personally, think they should have shipped with this, but I'd expect this to get rolled into a future release.

https://github.com/flashbots/mev-boost

[mgraczyk]

Just to make this clear, the MEV problem and centralization pressure is still there, it's just been temporarily disrupted. Like you said, this can be fixed more easily now but hasn't yet.

[latchkey]

The centralization issue of block formation has been made, temporarily, worse with the switch to PoS [0]. I expect them to clear this up in the future.

Introducing mev-boost now would have likely caused delays in the merge and at some point, you just have to make the switch and fix things later, which is what they did.

[0] https://twitter.com/koeppelmann/status/1570436882483523585

[mgraczyk]

Thanks, I hadn't seen this distribution.

[danuker]

I have another question.

Why would a centralized relay (flashbots) NOT take advantage of all the orders it processes?

As far as I can tell, the MEV has just moved from the miners to the flashbot(s?).

[meltedcapacitor]

Reputation?

Folks will stop sending them their TX if they never come out in blocks, but competing copy TX with someone else's address systematically do. So that they do their job is, to a degree, verifiable.

It's a small community who all know each other, so antisocial behaviour can be punished using traditional village politics technology.

[danuker]

Well, the reputation I now perceive is "abysmal", because everything is served through Cloudflare.

That means Cloudflare can capture or sell the advantage also, unnecessarily.

[belltaco]

The article says it's altruistic.

[bostik]

Not quite. It says this "may be altruistic". "May" does a lot of heavy lifting there.

From an outsider's perspective, a more likely explanation is that the funding is a subsidy. The VC having a stake in this space would have invested in a lot of other companies too. If their funding for Flashbots is notably less than the aggregate expected value of their total investment in the ecosystem at large, and if without Flashbots that expected value would drop by more than the funding amount, then the subsidy would be a net positive investment for that VC.

In other words, they may have seen Flashbots as an ongoing cost of doing business.

And if they had indeed achieved staying centralisation, there's always the access fee structure to hike up.

[davidgerard]

Right now, because there's no other way to cash out. The ETH you get for your stake stays locked up with your stake!

The only ETH a validator can get from validating that they can sell immediately is their take from MEV, i.e. frontrunning.

[throwawayQuwcy]

Incorrect - since the merge validators are been getting ETH1 transaction fees & block rewards (even non-mev validators)