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Frontrunning in Decentralized Exchanges, Miner Extractable Value, and Consensus Instability
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- เผยแพร่เมื่อ 18 ส.ค. 2024
- Flash Boys 2.0: Frontrunning in Decentralized Exchanges, Miner Extractable Value, and Consensus Instability-Philip Daian, Steven Goldfeder, Tyler Kell, Yunqi Li, Xueyuan Zhao, Iddo Bentov, Lorenz Breidenbach, Ari Juels
Blockchains, and specifically smart contracts, have
promised to create fair and transparent trading ecosystems.
Unfortunately, we show that this promise has not been met. We
document and quantify the widespread and rising deployment of
arbitrage bots in blockchain systems, specifically in decentralized
exchanges (or “DEXes”). Like high-frequency traders on Wall
Street, these bots exploit inefficiencies in DEXes, paying high
transaction fees and optimizing network latency to frontrun, i.e.,
anticipate and exploit, ordinary users’ DEX trades.
We study the breadth of DEX arbitrage bots in a subset of
transactions that yield quantifiable revenue to these bots. We also
study bots’ profit-making strategies, with a focus on blockchainspecific elements. We observe bots engage in what we call priority
gas auctions (PGAs), competitively bidding up transaction fees in
order to obtain priority ordering, i.e., early block position and
execution, for their transactions. PGAs present an interesting
and complex new continuous-time, partial-information, gametheoretic model that we formalize and study. We release an
interactive web portal, frontrun.me, to provide the community
with real-time data on PGAs.
We additionally show that high fees paid for priority transaction ordering poses a systemic risk to consensus-layer security.
We explain that such fees are just one form of a general phenomenon in DEXes and beyond-what we call miner extractable
value (MEV)-that poses concrete, measurable, consensus-layer
security risks. We show empirically that MEV poses a realistic
threat to Ethereum today.
Our work highlights the large, complex risks created by
transaction-ordering dependencies in smart contracts and the
ways in which traditional forms of financial-market exploitation
are adapting to and penetrating blockchain economies.
![The moment we stopped understanding AI [AlexNet]](http://i.ytimg.com/vi/UZDiGooFs54/mqdefault.jpg)
Revolutionary paper and an amazing video to match.
I feel cool and smart at the same time by watching this video :D
this video is amazing, thank you!
This is the most high-end intelligence I've had free access in a long time. Really genuine content.
Great video, wish there were more like this on MEV :)
this is some gigabrain shit
fascinating stuff. Has MEV been addressed by the ETH leadership or is this still a problem?
Please post more!
Absolute legend friend 👀💎🌹
7:00 Would this logic still apply today on the Ether network? After the Ethereum upgrade, there are no miners to actually encourage higher gas prices.
Great and I mean great insight...you wouldn't happen to offer a paid course would you?
Telos is going to solve the front running issue with their EVM scheduled to release this summer.
Your grim trigger section is describing Keeper DAO.
?
@Alex Leung How so?
that nuclear mode is mindblowing, wow, I want to have a bot now, please tell me where I can get one, hehe
good
The grim trigger strategy has been the behavior of eve online markets for going on a decade now.
This guy loves saying the word "atomically"
There is no such problems in Solana ecosystem