Bitcoin MEV: Workstream Update Thread

Core Blockchain
#1

There are two independent topics that have been at the forefront of the Stacks community recently. We want to provide a summary here by delineating these two topics, describing them, and explaining next steps. We’ve gathered some notes from Working Groups calls to begin the discussion here.

Here are the two topics:

  1. Orphan blocks (for information and updates on this topic, please see this thread.)
  2. Bitcoin MEV (read on)

The core developers are aware (and have been aware) of both of these for some time, and are currently taking steps to further explore and gather additional data about each issue.

Bitcoin MEV

The Bitcoin MEV is a known issue with several active proposals being researched.

TLDR:

A Bitcoin miner (F2Pool) is excluding block commit transactions from other Stacks miners in the Bitcoin blocks it produces. It thus has no competition, and is able to mine Stacks blocks for minimal cost.

Current impact on the chain: PoX participants (who receive bitcoin in exchange for supporting chain security) in blocks created by F2Pool’s Bitcoin miner have lower payouts. Maintaining healthy PoX action is important because it incentivizes users to support the overall security of the network via Stacking.

Next steps?: In short, conducting research to determine the best approach to solve this problem. There are three proposals discussed on the forum, two of which are smaller in scope and could be activated by network voting in a shorter time frame. These are outlined in the doc linked in the next section. These proposals, as well as some alternatives, are being analyzed and evaluated by token economics experts hired by the Stacks Foundation. The research is slated to conclude roughly around 4/21, after which engineering work and testing can promptly begin.

Get more information:

:rotating_light: Ongoing updates:

Please follow this thread, updates will be posted as replies!

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Stacks Blockchain Core Development Update, June 2023
Breaking down the recent Blockworks report
Stacks 2.4 is here! 🚀 (Stacking to be re-enabled)
RFC: PoX reservation or smoothing as a countermeasure for Bitcoin MEV
#2

Thanks for posting! Makes sense to separate the two topics. I’ve noticed the orphan blocks issue for a while, I think it got a bit more pronounced recently – the short-term miner config changes and then further investigation for a patch can help a lot.

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#3

Do you have more details about the measurements for the entity that creates Orphan blocks?

How does mining taking off bitcoin impacts orphan blocks?

#4

At the moment, we haven’t obtained any novel findings from measurements.

I assume by the second question, you are referring to Jude’s mining pool proposal. In that proposal, since there is no longer active competition in mining blocks, and miners collectively vote on which transactions get included in the next block, we would not expect to see re-orgs like the kind we are seeing today. However, if there is a high amount of miner contention (which is of economically disincentivized, but still possible), then there could be orphan blocks.

#5

Is the “Unified Mining Pool proposal” going forward and how to mitigate centralization concerns in the Unified Mining Pool proposal?

#6

I’d recommend commenting on the RFC (request for comments) thread: RFC: Lift mining off of Bitcoin

That proposal is still just a proposal, and the RFC title is explicitly to solicit feedback, questions, and comments.

1 Like
#7

Inviting everyone to join SIP call with Matty on 14th Apr, he has lots of stats on mining very knowledgeable.

Stacks Blockchain Core Development Update, June 2023
#8
#9

Update on the second issue, Bitcoin MEV.

The external contractor came back with a report on the impact of potential solutions. I’m linking the report here.

We’ll discuss these solutions further in the Community SIP call happening next Friday, on May 5.
MEV Report Draft v2.pdf (1.5 MB)

#10

It’s been a second since the last update, so thought I’d comment on the status of the Bitcoin MEV solution. A number of the core devs have been tied up with a series of urgent network upgrades over the past few weeks. We’ll be meeting within the next two weeks to converge on an investigated solution. This does mean that work on the solution is delayed. Engineering work will most likely commence near the end of May.

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#11

Update: There will be a meeting this week to discuss part 2 of the solutions report. Stay tuned on the stacks-core-devs for the meeting invite & link.

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#12

A comprehensive update to the network was posted in this forum thread.

I’m copying the section related to Bitcoin MEV here:

  • Current Status: The community gathered on May 26th to discuss this issue, and we narrowed in on a particular class of solutions after reviewing the report the Stacks Foundation commissioned from a 3rd-party tokenomics firm. If you’d like to read more about the solutions being considered, refer to the section on reward weighting here, and you can look at the RFC in the forum post here.
  • What’s next: Lock in a specific solution from the overall class of solutions, break the work down into issues. This work will be in the next planned hard fork, which is likely to be in a few months from now.
  • How you can help: Attend future discussions for this issue, which will be posted on the Stacks public calendar as they are scheduled.
  • Future updates: I will continue to post regular updates on Bitcoin MEV progress here.
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#13

Dear all Stacks/Bitcoin community:
To expand further “How you can help” in Pavitthra’s comment, in additional to joining the discussions of public calls, there are targeted questions core devs would like to know from the community if you have any thoughts/feedback:

  • Q1. Which proposal, PCR or Smoothing, seems to adequately addresses the issue of miner extractable value? What improvements or changes would you suggest?
    • Q2. You can evaluate the solutions on the basis of: does it adequately deter MEV miners from excluding block commits of other miners?
  • Q3. What changes to miner behavior might result from implementing either of these solutions? Do these changes affect the efficacy of the chosen solution?

Ref doc with all 4 solutions: Proposals for Bitcoin MEV issue - Google Docs

Looking forward to hearing feedback from all community, or if you know anyone who might have knowledge in this can help gather deeper thoughts.

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RFC: Minimum-bid PoX (to thwart Bitcoin MEV)
RFC: PoX reservation or smoothing as a countermeasure for Bitcoin MEV
#14

Posting an update in here since it’s been a second.

The work to address the Bitcoin MEV behavior is going to be rolled into a larger effort to improve the network protocol overall.

While the exact details are still being fleshed out, you can see an RFC here

Notably, one of the aims of the proposal is the following:

Eliminate coinbase reward based incentives for miners to attempt to crowd each other out of the protocol."