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Flashbots

blog.bitmex.com

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Re: Flashbots

#41

Post by belltaco »

danuker wrote: post #35
yuan43 wrote: post #5

> 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 "r…

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?).

The article says it's altruistic.

Re: Flashbots

#44

Post by pcthrowaway »

ISL wrote: post #34
benreesman wrote: post #32

Semi-aside: the term “front running” is pretty overloaded and more than a little charged at this point. It gets applied to a whole spectrum of activities from the socially positive (racing to the inside with a post-only limit order to minimize the still positive price improvement) to the murky and probably kind of shady (MEV ecosystem) to outright fraud (an agency execution firm literally loading up before executing…

Came here to write the same. I'm real happy when someone runs ahead of my limit orders and provides me liquidity/execution. If I wanted to pay less, I would have set the limit lower.

You can set a slippage tolerance when you make an order on a decentralized exchange. It's basically the same as a limit order priced to market, where you effectively set the "most you're willing to buy for" / "least you're willing to sell for" and occasionally get better rates.

With a DEX your transaction might just not execute at all some of the time of creating the transaction, so you might burn a transaction, and there's no orderbook for the order to sit in til later.

Re: Flashbots

#45

Post by lazzlazzlazz »

This is a deeply misleading headline. Other people have explained it as well, but Flashbots is a relay for transmitting transactions to the Ethereum network in a way that preserves their privacy (and exposure to something called MEV[1]). It's purely optional and the vast majority of transactions[2] do not actually pass through this relay. MEV is an interesting area of research[3].

Unrelated aside: why is the quality of Hacker News posts and comments on crypto so bad? I experience extreme Gell-Mann amnesia[4] almost every post I read. This is the industry I work in and the amount of misinformation produced and spread on Hacker News is absurd.

[1]: https://arxiv.org/abs/1904.05234

[2]: https://explore.flashbots.net

[3]: https://flashbots.notion.site/flashbots/mev-day-836f88806995...

[4]: https://www.johndcook.com/blog/2021/01/18/gell-mann-amnesia/

Re: Flashbots

#46

Post by danuker »

meltedcapacitor wrote: post #39
danuker wrote: post #35

Earlier quoted context omitted.

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?).

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.

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.

Re: Flashbots

#47

Post by biolotthek »

benreesman wrote: post #32

Semi-aside: the term “front running” is pretty overloaded and more than a little charged at this point. It gets applied to a whole spectrum of activities from the socially positive (racing to the inside with a post-only limit order to minimize the still positive price improvement) to the murky and probably kind of shady (MEV ecosystem) to outright fraud (an agency execution firm literally loading up before executing…

What you call socially positive others may call execution cost. Because you might improve on a pension fund limit order. So it's best to not get into this territory.

Re: Flashbots

#48

Post by biolotthek »

lazzlazzlazz wrote: post #45

This is a deeply misleading headline. Other people have explained it as well, but Flashbots is a relay for transmitting transactions to the Ethereum network in a way that preserves their privacy (and exposure to something called MEV[1]). It's purely optional and the vast majority of transactions[2] do not actually pass through this relay. MEV is an interesting area of research[3]. Unrelated aside: why is the quality…

No post body was provided.

Re: Flashbots

#50

Post by throwawayQuwcy »

davidgerard wrote: post #28
yuan43 wrote: post #5

> 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 "r…

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.

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