Ethereum

research && software ➝ @ethereum foundation ⟠;
https://twitter.com/mikeneuder

In this thread I'm going to break down a potential Ethereum upgrade called Execution Tickets, originally presented by @justindrake and formalized in a research post by @mikeneuder.eth. It shift's validators roles and provides a lot of benefits to the protocol

🧵
0/15

/ethereum foundation | control the memes control the minds paragraph.xyz/@chaskin

1/ Validators currently attest to new blocks, voting on the tip of the blockchain, and, if chosen, propose new blocks (list of transactions). However, 95% of them don't build blocks themselves and instead rely on an external software which sends them a block to propose in return for a fee

2/ The proposed change changes the validators role: they still attest but no longer propose the part of the block that includes the list of transactions. Now a slot would be split into two phases, a beacon round and an execution round

3/ In the beacon round, the randomly selected validator proposes the beacon part of the block this part does not include the list of transactions. They also include an "inclusion list" which lists all the transaction they have in their mempool, ensuring censorship resistance. Validators attest to this beacon block

4/ The execution round introduces a new lottery where, if selected, you win the right to compile the transaction list for the block (execution block), you must include transactions on the inclusion list from the beacon phase. A new group of execution attesters attest to the execution block (submitted transactions)

6/ The market to buy a ticket will be conducted via a mechanism similar to EIP 1559. For example, if there’s more than the target number of tickets available in the pool the base fee will go up and and vice versa

7/ One benefit is smoothing validator rewards. Right now the pay from realtime MEV auctions is volatile, sometimes over >300 ETH. With execution tickets pegging rewards to the future block space validator earnings become much more consistent. Think of it as blockspace futures and over the long run MEV is less volatile

8/ Another advantage is it's easier to create fully trustless and decentralized LSTs, similar to Rocket Pool. Currently, there's a risk of LST operators taking the MEV payment for themselves instead of depositing it into the pool if the MEV payment exceeds their posted collateral

9/ Imagine being selected to propose a block and the MEV rewards exceed your collateral (8 ETH + 2.4 ETH in RPL). If the MEV is 400 ETH the rational move is to take the MEV and forgo your collateral. The new system removes this dilemma b/c validators don't profit from realtime MEV

10/ The introduction of a specialized sophisticated entity that will be proposing transaction lists allows us to deprioritize secret leader elections and ePBS

11/ For secret leader elections - With a sophisticated proposer handling creating the transaction list, the risks of DDoS attacks on the new proposer decrease, as these entities are better equipped to manage such threats than simple validators currently are

12/ For ePBS - We don’t need to worry about validators not getting paid because their payments will come from attesting and new issuance and the sophisticated proposer will be sure they are paid via some other means (MEV pipeline)

13/ This setup also allows the L1 to give preconfirmations for based rollups. Having a sophisticated proposer with the necessary resources ensures efficient and reliable preconfirmations of based L2 transactions

14/ The upgrade also tackles timing games where block builders delay submissions for an ~1% MEV increase. Since this gain is often less than the ticket's collateral, the risk of not proposing at all and losing that collateral makes participating in timing games irrational

15/ Lastly, this proposal introduces a straightforward and credibly neutral method for burning MEV: by simply burning the base fee generated from the sale of lottery execution tickets

fin

As you can tell I'm pretty excited about the potential benefits this upgrade could bring. It's still in the research phase so I recommend following @justindrake and @mikeneuder.eth for the most up to date info

For more

https://ethresear.ch/t/execution-tickets/17944

https://youtu.be/IrJz4GZW-VM?si=5aeVwsRdbcgQDMvf

https://ethresear.ch/t/economic-analysis-of-execution-tickets/18894

5/ In order to participate in the new lottery you need to buy an execution ticket. This ticket grants you the right to create the execution block (transaction list) at sometime in the future. You also need to deposit collateral which will be slashed if your ticket is randomly selected and you don't propose a block