This episode explores a wide range of topics concerning MEV and Layers, from the current centralized sequencer setting to the future sequencer decentralization era, with a deep dive into the Starknet case. The insights from Nethermind offer a glimpse into how protocol designers navigate the intricate and interconnected elements of MEV and L2 dynamics, providing a tangible understanding of the current landscape and its trajectory.
The first quarter of 2024 stands out as a period of remarkable growth for Layer 2 solutions (L2s). During this time, gas fees on L2s continued to decline, daily activities on select L2 platforms began surpassing those on the Ethereum mainnet, and a wave of innovative L2s with modular designs emerged. The prosperity of L2s also brings sequencer decentralization into the spotlight. With a multitude of both anticipated and unforeseen innovations shaping the L2 landscape, the evolution of MEV warrants closer examination.
In this episode, Stephanie (@stephaniiee_ho) delves deeper into her MEV series alongside guests from Nethermind: Jorik (CTO of Nethermind) and Conor (@ConorMcMenamin9, a protocol researcher at Nethermind). Together, they explore a range of pertinent topics relating to L2s and MEV. This includes discussions on how MEV is extracted within the current centralized sequencer setting, the array of solutions for sequencer decentralization today, MEV opportunities and mitigation strategies in the era of sequencer decentralization, the mental models surrounding L2s addressing MEV, and the emerging options of outsourcing block proposal to a third party. Additionally, as part of Starknet’s design team, they provide insights into implementation considerations, which involve navigating realistic and complex challenges.
While these discussions may appear premature given the many unknowns and ongoing projects still under construction, the real value lies in the mental models shared. These insights offer a glimpse into how protocol designers navigate the intricate and interconnected elements of MEV and L2 dynamics, providing a tangible understanding of the current landscape and its trajectory.
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Wen Building is supported by Antalpa Labs. Antalpha Labs is a Web3 developer community dedicated to push the boundaries of crypto space by supporting the innovation and success of open-source projects.(https://labs.antalpha.com/hackerhouse/)
This episode is also supported by Starknet | 中文 (@Starknet_ZH), a Starkpilled Chinese community.
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Timestamp
02:13 Introduction
03:50 Tx life cycle on Starknet in the centralized sequencer setting
06:24 MEV extractions on Starknet
08:54 Unique MEV opportunities on L2
11:15 The risk of reorg in zk-rollups
13:27 A measure of L2 finality risks to be expected on L2beat
14:42 An overview of the L2 sequencer decentralization solutions
17:20 Introduction of Based Rollup
18:28 Starknet's solution and rationale
24:35 MEV extraction space after sequencer being decentralized
28:06 Mental model of L2s dealing with MEV
33:42 Is PBS necessary on L2? If yes, in what sense?
39:40 Different options for outsourcing block proposal to a third party?
46:05 Starknet's current priorities
49:40 The perspective of protocol design
52:40 Projects of Starknet and Nethermind that need your engagement
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Disclaimer: Any projects or tokens mentioned in Wen building don't construe any financial advice. This podcast is just for informational purposes.
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Resources:
Nethermind: https://www.nethermind.io/
Starknet docs: https://docs.starknet.io/documentation/
Starknet forum: https://community.starknet.io/