Tarun Chitra pfp
Tarun Chitra
@pinged
One of the most interesting things that those in Ethereum can learn about from Solana is Jito's MEV auction; here are some high level differences: 1. # of auctions isn't fixed per slot; dynamically changes based on txns 2. Set of auctions implicitly defines a DAG of state priority 3. Often more efficient than PBS (!)
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Tarun Chitra pfp
Tarun Chitra
@pinged
Let's try to dive into these features and get some heuristics for why they help 1. Dynamic auctions The number of auctions run in a slot changes based on the transactions; for instance, if there are 6 txns going to 3 different Uniswap pools, then three auctions are implicitly run for each Uniswap pool
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Tarun Chitra pfp
Tarun Chitra
@pinged
Note that the number of auctions depends on the particular state (= Uniswap reserves at program address X) that is touched — if there were only 2 different pools interacted with, then there are only two auctions tl;dr you only _know_ the number of PBS style auctions you run _conditional_ on a set of bundles!
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Tarun Chitra pfp
Tarun Chitra
@pinged
Why do dynamic auctions? A. Parallelism: if state is disjoint, auctions can be run in parallel) B. Streaming: Allow transactions to be streamed directly to proposers rather than need to be collected and batched in a mempool — when a new transaction arrives and touches new state, a new auction is started
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Tarun Chitra pfp
Tarun Chitra
@pinged
C. Lower bid sniping: Different auctions are independent — 'reserve price' is lower as competition is partitioned vs. everyone competing for the same item in a PBS-style single item auction — like a combinatorial clock auction (c.f. Ausubel https://www.ausubel.com/auction-papers/practical-guide-to-the-cca.pdf)
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Tarun Chitra pfp
Tarun Chitra
@pinged
Mathematically, these three things give you _very_ different queueing behavior A single item auction (e.g. PBS) tends to have a classic M/M/1 queue behavior (assuming rational + random bidders) — there's a single auction and it has some notion of probabilistic arrivals https://en.wikipedia.org/wiki/M/M/1_queue
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Tarun Chitra pfp
Tarun Chitra
@pinged
On the other hand, the Jito style auction has an arrival process that looks more like the Chinese Restaurant Process — a probabilistic process where a 'customer' (txn) arrives and joins an existing auction with some probability or starts a new auction ("joins an empty table") with some probability
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Tarun Chitra pfp
Tarun Chitra
@pinged
The Chinese Restaurant Process style of queuing (which is a Dirichlet process) can be more efficient than the M/M/1 depending on the particular parameters (e.g. probability of joining an existing table = probability of multiple txns touching the same state)
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Sheldon Trotman pfp
Sheldon Trotman
@sheldon
Is the concept of multiple (non-fixed # of) parallel auctions to imply better pricing of more granular pieces of state? And if not, along what axis of “efficient” are you considering better than PBS style (eg lower overall price, less competitive)? And wouldn’t this mean then less revenue? I am missing something.
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