透過一篇文章了解 BNB 鏈上 MEV 解決方案的潛力

96 0 0

MEV refers to the maximum profit that a miner, validator, or other network participant can extract by reordering, including, or excluding transactions within a block. In this article, we will explore the mechanism of MEV and how BNB Chain鈥檚 Proposer-Builder Separation (PBS) model reshapes the MEV landscape.

What is MEV?

MEV stems from the decentralized nature of blockchain technology. Unlike traditional financial systems where the order of transactions is determined by a central authority, blockchain transactions are ordered according to protocol rules. This provides miners and validators with the opportunity to optimize transaction ordering to gain profits.

MEV incentivizes network participants to maintain and secure the blockchain. By allowing miners and validators to profit from transaction ordering, MEV provides a financial incentive to support the network. This can improve security and stability because participants are more likely to invest in better hardware and infrastructure to maximize their earnings.

MEV-driven activity can improve market efficiency by enabling arbitrage opportunities and liquidity provision, which are critical to the healthy operation of decentralized exchanges and financial protocols. However, MEV also brings challenges, such as potential centralization and unfair transaction priority risks, which must be managed to ensure the balance of the ecosystem.

Common MEV strategies

In decentralized exchanges (DEX), miners and validators use a variety of MEV strategies to maximize profits:

Arbitrage: Taking advantage of price differences between different markets by front-running other traders.
Reverse Trading: Placing a sell order after a large buy order to profit from buying pressure.
Sandwich Trading: Placing buy and sell orders around a target trade to profit from price movements.
Flash Loans: Borrow and repay funds in a single transaction to enable profitable trades with no upfront capital.

Several strategies have been developed to mitigate the exploitation of MEV, such as the Fair Sorting Service (FSS) for decentralized and fair transaction ordering, off-chain transactions, batching to minimize the impact of transaction reordering, and protocols that allow users to set maximum slippage limits.

Introducing BNB Chain鈥檚 MEV solution

To meet the challenges of MEV and take advantage of its opportunities, the BNB Chain ecosystem has developed a comprehensive MEV solution powered by Blockrazor, blocksmith, and NodeReal. The BNB Chain open source repository maintains a list of builders and corresponding RPC endpoints.

Key features of the BNB Chain MEV solution

Integrated validator support: About 23 of the 40 active validators on BNB Chain have integrated with MEV providers.
Standardized Builder API: This API, proposed in BEP 322, allows validators to accept builder registrations in a permissionless manner, enabling seamless integration with multiple builders and promoting competition.
Enhanced transparency: Robust data reporting and transparency mechanisms enable all participants to track and understand MEV activities, which is critical to optimizing the MEV process and maintaining the integrity of the blockchain.

Challenges of Current MEV Solutions

Despite the progress, challenges remain with the current MEV landscape on the BNB chain:

Validator complexity: The lack of a standardized builder API requires a unique implementation for each MEV solution, complicating integration and maintenance.
Fragmentation and lack of an open market: A single MEV provider leads to fragmentation. An open market for MEV searchers can simplify the process and increase decentralization.
Revenue and data opacity: The inability to track and understand MEV revenue generation and participant contributions hinders fair and effective evaluation. Robust data reporting is critical to addressing this issue.

New Proposal: BEP 322 MEV Supply Chain Solutions

BNB Chain is enhancing its MEV landscape with the Proposer-Builder Separation (PBS) model introduced in BEP 322. This model separates validators from block builders, allowing builders to create blocks and propose them to validators, who then choose the most profitable blocks. Key aspects include:

Builder Registration: Permissionless builder registration enables seamless integration with multiple builders.
Block construction and proposals: Builders propose blocks using a unified API, simplifying production.
Expense Reconciliation: Automated expense reconciliation simplifies the expense process and increases transparency.
Fair profit distribution: MEV profits are distributed among searchers, builders, validators, and BNB holders. Builders use private memory pools to protect users from attacks and provide better pricing.

Advantages of BNB Chain鈥檚 MEV solution

For builders

Improve profitability: Implement a diversified pricing mechanism, offering free services to searchers while charging verifiers.
Competitive Marketplace: Standardized builder APIs promote competition, innovation, and efficiency.

For Validators

Maximize Rewards: Integration with MEV providers can increase profitability by 7% to 15%.
Simplified integration: Unified builder API reduces integration complexity, reduces maintenance effort, and minimizes security vulnerabilities.

For wallets and users

Improved user experience: Users benefit from better trade execution and reduced risk of front-running.
Fairer transaction processing: Standardized and transparent MEV processes promote fair transaction prioritization.

綜上所述

MEV is a natural and important aspect of blockchain technology that improves profitability and efficiency. BNB Chains PBS model solves common MEV challenges and promotes a competitive, transparent, and fair MEV ecosystem. Builders can maximize profitability through diversified pricing mechanisms, and validators can simplify integration and maximize rewards. Users benefit from improved transaction execution and fairness.

This article is sourced from the internet: Learn about the potential of MEV solutions on BNB Chain in one article

Related: FTX Readies to Sell More Solana (SOL): Price Impact

In Brief FTX to auction Solana tokens as part of bankruptcy liquidation. Auction format may also result in community bidding for FTX’s Solana. Solana tests key $156 resistance, with potential rise to $185. FTX’s bankruptcy estate is preparing for a pivotal move by auctioning a significant batch of Solana (SOL) tokens. This strategy forms part of FTX’s liquidation process initiated after its collapse in November 2022. The upcoming auction, which diverges from previous fixed-price sales, is a strategic shift signaling potential changes in market dynamics. Will the Crypto Community Participate in the Solana Auction? Previously, between 25 million and 30 million SOL tokens were sold, netting nearly $1.9 billion. These were priced at $64 each, a sharp 60% discount from the market price then. However, the discount came with a…