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research_roadmap.md

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Flashbots Research Roadmap

Phase 1: MVP Systems Description / Ethical Structure (Nov 20 - March 21)

Phase 1 is practical/ultra-applied research akin to 'industry' R&D, in close loop with development. We expect Flashbots developers to be heavily involved in this phase.
Phase 1 has 2 research papers as a deliverable. Phil Daian will by guiding the outline, goals and high-level questions related to these papers. The outcome of Phase 1 is immediately relevant to providing MVP and communicating our intentions to the community. We expect to be able to describe the remainder of the research roadmap in-depth in our first research document under 'Future Work'.

Paper 1: Whitepaper / proof-of-concept

Paper style/field: Cryptocurrency systems paper, short paper/PoC (9pgs)
Similar papers: bloxroute, Thunderella, FlyClient
Venue: FC22? USENIX?

Research question: How can we build a "good" auction mechanism for validator priority "bribes"?

  • "Good":
    • Gas efficiency for community
      • Measure: gas saved with perfectly efficient arbs, gas currently wasted on-chain
    • Network overhead for community
      • Measure: current arb-bot network overhead, full node bandwidth wasted
    • Prefer off-chain computation whenever possible for equivalent security
      • Formalize trade-off between on-chain / off-chain arb computation
        • Is there any computation we should move off-chain (into bundle processing/switching)?
    • Efficiently express preferences of all network actors
      • Enumerate current arb use cases, show that system covers all of them
      • Discuss trade-offs in order type complexity vs. latency
    • Permissionless: no KYC / ad-hoc trust required in design
      • Create security criteria for users not needing to trust miners/pools in PGA
      • Enumerate where current design falls short, impliations of shortcomings
    • Better for miners unilaterally than vanilla Geth
      • Measure miner latency: assuming both no Flashbots txs / saturation
      • Measure required resources on miner side
      • Measure latency penalty of minimal viable switching algorithm [critical]
      • Academic definition for "strictly dominating" client in game theory?

Research question: How can we leverage existing auction literature?

  • Survey: ad auctions / other priority bidding games. Known pathologies / design trade-offs
  • Discuss traade-off of first vs. second price auction, continuous vs. discrete auctions
  • Mempool auction theory?

Research question: How does architecture differ across chains? PoW/PoS/leaderless/other?

  • Hypothesis: architecture is general and will allow for priority in all systems
  • Measure percent of hashpower / probability of success for PoW / PoS, leaderless protocols

Paper 2: Ethical / community charter

Purpose: Intended to open discussion, describe future goals, elicit community priority

Research question: Should we build a "good" auction mechanism for validator priority "bribes"?

  • Open question: what is state-of-the-art in discussion on parasitic vs. helpful arbitrage / "MEV"
  • Open question: what are market designs that synergize with Flashbots / provide benefits to users other than arbers

Research question: How do we minimize possible user harm of priority bribe incentives?

Research question: How do we minimize possible consensus harms of priority bribe incentives?

Resarch question: Should we allow for any MEV on the system? Should we bound the MEV?

Engineering question: What kind of transparency should we allow? Fully transparent MEV portal?

  • Who leads? Need firm commitment to develop, keep public.

Paper 3: Clockwork Finance - Toolkit for understanding MEV [Cornell Research]

Research question: how do new contracts measure their own MEV? Formally, what determines and affects MEV?
Artifacts: "MVP" tools for measuring, calculating, and reasoning about MEV.

Phase 2: Ethical Consideratons / Community Goals

Paper style/field: CS ethics / social sciences paper, short paper (10-12pgs)
Similar papers: On the Moral Character of Cryptographic Work, Will the Market Fix the Market
Venue: IEEE S&B? Ledger journal?
Potential Collaborators: Ethereum Foundation? Community call? Other MEV projcts?

Research question: How can we build fair markets for users?

Research question: What is fair ordering

  • Support work like https://eprint.iacr.org/2020/269 with a grant?

  • Implement similar systems? Industry partnerships? Internal definitions?

  • Continue exploration mapped out by Phase 1>>Paper 2

  • How can we create a robust organization to support our aims of commons infrastructure?

  • Depends on MVP gaining traction

Phase 3: Refinements and Product Implications

Paper style/field: CS systems / systems security
Similar papers: ??
Venue: ??
Potential Collaborators: ??

Continue exploration mapped out by Phase 1>>Paper 1 Derive list of metrics to collect from deployed product Depends on MVP gaining traction

Phase 4: Long-Term Game Theory and Profit Distribution

Paper style/field: CS / econ, computational economics
Similar papers: quadratic voting, ad auctions
Venue: EC?
Potential Collaborators: ??

Research Question: What does value capture / extraction look like in an auction-based ecosystem? Compared to defi as a whole?

Research Question: How best to distribute profits?

  • Incentive alignment between miners, users, defi developers, etcetc.

Research Question: How best to hold the auctions?

Phase 5: ???

To be determined after MVP phase