This Paradigm-backed project is making Ethereum's technical underbelly more accessible
In the crypto world, MEV (‘Maximal Extractable Value’) refers to block producers’ ability to reorganize the sequence of transactions in any given block to extract a premium.
While MEV can be used nefariously in instances such as front-running large transactions, it can also be used for arbitrage opportunities that do not directly impact other market participants.
In this episode of The Scoop, we take a closer look at the world of MEV with Viktor Bunin, a protocol specialist at Coinbase, and Stephane Gosselin, the founder of Flashbots — a research project that provides MEV solutions to Ethereum validators.
According to Gosselin, the purpose of Flashbots is to make markets more efficient:
“We look at market structures, we research them and we develop products to try to improve them, and make sure that they're aligned with the intent of the chains that they're operating on top of.”
How Flashbots works in practice is essentially by creating a separate layer where users can bid against each other to have their transactions included on the blockchain.
As Bunin explains,
“It essentially creates a private mempool or a ‘fastlane’ where it says, ‘Hey, you're welcome to compete all you'd like, but you should do it at this layer,’ and then there will be a standardized way by which whoever is a winning bid — essentially the winning transaction — that will be the one that gets included on the blockchain and no others.”
Episode 91 of Season 4 of The Scoop was recorded remotely with The Block's Frank Chaparro and Viktor Bunin, protocol specialist at Coinbase and Stephane Gosselin, MEV boost architect & co-founder of Flashbots.
Listen below, and subscribe to The Scoop on Apple, Spotify, Google Podcasts, Stitcher or wherever you listen to podcasts. Email feedback and revision requests to podcast@theblockcrypto.com.
This episode is brought to you by our sponsors Tron, Chainalysis & IWC Schaffhausen
About Tron
TRON is dedicated to accelerating the decentralization of the internet via blockchain technology and decentralized applications (dApps). Founded in September 2017 by H.E. Justin Sun, the TRON network has continued to deliver impressive achievements since MainNet launch in May 2018. July 2018 also marked the ecosystem integration of BitTorrent, a pioneer in decentralized Web3 services boasting over 100 million monthly active users. The TRON network completed full decentralization in December 2021 and is now a community-governed DAO. | TRONDAO | Twitter | Discord |
About Chainalysis
Chainalysis is the leading blockchain data platform. We provide data, software, services, and research to government agencies, exchanges, financial institutions, and insurance and cybersecurity companies in over 60 countries. Backed by Accel, Addition, Benchmark, Coatue, Paradigm, Ribbit, and other leading firms in venture capital, Chainalysis builds trust in blockchains to promote more financial freedom with less risk. For more information, visit www.chainalysis.com.
About IWC Schaffhausen
IWC Schaffhausen is a Swiss luxury watch manufacturer based in Schaffhausen, Switzerland. Known for its unique engineering approach to watchmaking, IWC combines the best of human craftsmanship and creativity with cutting-edge technology and processes. With collections like the Portugieser and the Pilot’s Watches, the brand covers the whole spectrum from elegant timepieces to sports watches. For more information, visit IWC.com.
The Tokenomics Episode: Why ‘EIP 1559 Is Like Catnip for Investors’ - Ep.292
Two tokenomics experts, Yan Liberman, co-founder of Delphi Digital, and Viktor Bunin, protocol specialist at Coinbase Cloud, discuss their experiences building tokens, their thoughts on the recent ENS/PSP airdrops, and what “fair” token distribution looks like. Show highlights:
the definition of tokenomics
what factors (such as utility, fairness, liquidity, security, etc.) token designers are incentivizing for
what Yan learned from helping design Astroport tokenomics
what Vikor learned from helping design Threshold, the token that was built to facilitate the merge of NuCypher and Keep
how the EIP 1559 burn has changed Ethereum’s tokenomics
how EIP 1559 has improved investor outlook for Ethereum
why Viktor is worried about people actually using Ethereum going forward
what Viktor and Yan think about how the ENS airdrop farming issue was handled
what Viktor and Yan think about ParaSwap’s PSP airdrop and why Viktor thinks ParaSwap made a “mistake”
how Viktor and Yan would go about airdropping a token to good actors instead of bad actors
how improvements in on-chain identity could help future airdrops
fair launch tokens versus VC-backed tokens
what the definition of fair is in terms of tokenomics
why Viktor thinks a token’s distribution is more important than a token’s launch
what could be the optimal way to distribute liquidity mining rewards
how community affects tokenomics
how to incentivize NFT-based tokens, like the forthcoming Bored Ape Yacht Club token, for the right goals
Thank you to our sponsors!
Crypto.com: https://crypto.onelink.me/J9Lg/unconfirmedcardearnfeb2021
Nodle: https://bit.ly/3AXGydJ
Yan Liberman -- co founder at Delphi Digital
LinkedIn: https://www.linkedin.com/in/yanliberman
Twitter: https://twitter.com/yanliberman
Viktor Bunin -- protocol specialist at Coinbase (Bison Trails)
LinkedIn: https://www.linkedin.com/in/viktorbunin
Twitter: https://twitter.com/ViktorBunin
Tokenomics 101 Primers:
The Tie: https://research.thetie.io/token-economics/
Smith and Crown: https://smithandcrown.com/research/issues-of-fairness-in-token-distribution/
A Timeline of Token Distributions: https://blog.coinlist.co/the-evolution-of-token-distribution-models/
Recent Airdrops + Airdrop farming
PSP:
https://medium.com/paraswap/introducing-the-psp-token-to-make-paraswap-even-more-efficient-and-decentralized-c4730e50be72
ENS: https://twitter.com/ensdomains/status/1457862602239926274
https://twitter.com/nicksdjohnson/status/1456424366850281488
Airdrop Farming
Potential airdrops coming up:
https://www.coindesk.com/business/2021/11/09/missed-the-ens-airdrop-here-are-the-crypto-projects-rumored-to-decentralize-next/
https://newsletter.banklesshq.com/p/the-ultimate-guide-to-airdrops
https://www.trustnodes.com/2021/11/14/ethereans-sneak-to-zksync-for-airdrop-farming
PSP drop w/ heavy requirements
https://www.coindesk.com/tech/2021/11/15/dex-aggregator-paraswap-launches-psp-token-on-heels-of-ens-airdrop-excitement/
ENS Blacklist
https://twitter.com/nicksdjohnson/status/1456048492141441027
Topics Mentioned
Astroport tokenomics
https://astroport.medium.com/hello-astro-announcing-the-astroport-governance-token-drops-a07a1bf3ed94
NuCypher + Keep merge
https://decrypt.co/73800/forget-hard-fork-what-happens-after-kee-nucypher-hard-merge
SushiSwap vampire attack
https://finematics.com/vampire-attack-sushiswap-explained/
Tokemak tokenomics
https://medium.com/the-capital/defi-2-0-is-it-the-next-wave-of-cryptocurrency-4499e838ea44
Miscellaneous
What is liquidity mining?
https://medium.com/coinmonks/what-is-liquidity-mining-and-how-does-it-work-d0ab491e607
The Internet of Money (recommended by Viktor)
https://theinternetofmoney.info/
Other Fun Topics
How Token Governance Mechanisms can be implemented
https://outlierventures.io/research/what-is-the-secret-to-building-valuable-tokens-part-2/
Crypto Gaming economics
https://outlierventures.io/research/p2e-2-0-a-new-economic-model-for-gaming-based-on-crypto-tokens/
Does farming represent progress in token distribution?
https://smithandcrown.com/research/adaptations-in-token-distribution-mechanisms-does-farming-represent-progress/
Should treasuries hold native tokens?
https://twitter.com/AntonioMJuliano/status/1460278949867442182
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