66 – Crypto’s Existential Threat | MEV Panel: Phil Daian, Georgios Konstantopoulos, Charlie Noyes


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Phil Daian is a researcher and software engineer and is leading the charge into mapping MEV with the Flashbots Project. Georgios Konstantopoulos and Charlie Noyes are both partners at Paradigm.

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Bankless Podcast #66: MEV Panel
Guests: Charlie Noyes, Phil Daian, & Georgios Konstantopolous

In this State of the Nation, we bring on big-brain experts behind projects like Paradigm and Flashbots to explain the complex but critical topic of MEV – commonly known as Miner Extractable Value, but as discussed in this episode, Maximum Extractable Value is a more appropriate descriptor. MEV is arguably the single most important unsolved problem in the crypto space.

In the context of incentives and network security, MEV generally refers to the ability of miners & validators to take advantage of their position as securers of the network. Blocks are verified by single entities, and these block producers have tremendous power when they are the ones adding a particular block to the blockchain. We refer to this instance as ‘God-Mode,’ in which a node has the power to assemble & order transactions at will. The threat here is the potential gaps between what is best for the network and what is best for the node.

As an internal and unbounded threat to blockchains, solving the problems that MEV presents is critical to maintaining proper consensus and ensuring decentralization and permissionless access. We take a deep dive into potential solutions, and the impact of EIP-1559 and Proof-of-Stake on MEV. Dive in to learn why despite the challenges ahead, Charlie says:

“In the absence of certainty, I’m willing to take the optimistic perspective.”

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Topics Covered:

0:00 Intro
8:00 Phil, Georgios, and Charlie
11:45 The Biggest Unsolved Problem
18:11 MEV – Maximum Extractable Value
22:25 Gamestop, Robinhood, and MEV
27:57 God-Mode Incentives
37:39 Quantifying MEV
44:55 Qualifying MEV
54:10 Flashbots
59:07 Rational Economic Leviathan
1:08:12 Time Bandits & Network Congestion
1:11:00 EIP-1559 and MEV
1:17:53 Proof of Stake and MEV
1:25:55 MEV and Economic Security
1:30:20 Slaying Moloch on Layer 2
1:40:00 Philosophical Questions
1:45:20 Cautiously Optimistic
1:49:40 Closing & Disclaimers

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Resources:

Phil on Twitter
https://twitter.com/phildaian?s=20
Georgios on Twitter
https://twitter.com/gakonst?s=20
Charlie on Twitter
https://twitter.com/_charlienoyes?s=20
Exploring Ethereum’s Dark Forest with Dan Robinson

Investing in DeFi Paradigms with Charlie Noyes

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Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here:
https://newsletter.banklesshq.com/p/bankless-disclosures

Bankless

30 Comments
  • Robert Bailey
    Posted at 03:51h, 22 May

    Scary monsters

  • Vinicius Chagas
    Posted at 16:25h, 22 May

    Another fantastic episode! The way that you guys put this complex problem in simple words is fantastic! Congrats for that… One point that I still didn't get: How the MEV would turn into security budget? I mean, In my point of view, MEV is a problem, a way that actors can act against the system to benefit themselves…

  • Remo Jacksan
    Posted at 11:18h, 24 May

    Guys check out CORGIB coin it's about to explode.

  • marstralia
    Posted at 11:22h, 24 May

    Very difficult to comprehend, and I have to admit I didn't make it to the end of the video. I have a question: Is MEV also inherent to DAG style networks?

  • Techspec _
    Posted at 11:44h, 24 May

    Can we get house tours

  • Jiajun Zeng
    Posted at 12:16h, 24 May

    28:55 soundtrack is not in sync with the graphic.

  • Gareth Lewis
    Posted at 12:27h, 24 May

    Where do the MEV $$$s come from? If the miners get this money, who does it come from? Also, on the charts showing the $MEV in the last few years… is the MEV paid in ETH and then converted to $ for the chart? If so, the massive increase in the price of ETH makes the charts look "hockey stick" like, however, if the chart was in ETH, wouldn't it look much more linear?

  • Techspec _
    Posted at 12:31h, 24 May

    my fav is the guy top right

  • Tapio
    Posted at 13:12h, 24 May

    At some point people will have the choice to use Chainlinks Fair Sequencing Service or pay increasing amounts to the MEV overlords. No way I'll let these parasites feed on me when I get the choice.

  • Tom wei
    Posted at 13:12h, 24 May

    Je pense qu'il y a plus sur ce marché que nous ne le savons. Demandez des conseils appropriés avant d'investir dans ce marché assez compliqué. J'ai gagné plus de 38 milliards de tonnes sur une allocation de 7 milliards de tonnes au cours des 8 derniers mois grâce à l'aide de Robert Parsons. Les choses pourraient empirer, alors faites-le plus intelligemment. Son te legram @Parsonstrades

  • FukU2222
    Posted at 13:44h, 24 May

    blows my mind how young and how wrinkly of a brain charlie is….

  • Sophie Parker
    Posted at 13:49h, 24 May

    Great show! One thing that concerns me is the sheer size of USDT mined and what it is backed by really. Lack of transparency around the proper audit reporting of USDT backed by whatever. Any valid info on this? Thx

  • Nikolay Tsanov
    Posted at 17:14h, 24 May

    I do think you guys are on the fanatical side of etherium, but that is some of the highest quality content out there! Probably only Hasu can top that 🙂

  • Николай Селезнев
    Posted at 17:27h, 24 May

    It's too hard for my brain to follow 🥴. I need it in written paraphrased format. Can someone emphasize and summarise in article?

  • Achilleas N
    Posted at 20:25h, 24 May

    Great to see such great minds working on this

  • Laurent
    Posted at 20:31h, 24 May

    ok.

    Best place to hear real people talking about MEV / MEVA.

    Thanks Bankless.
    You are required for the Crypto community.

  • TimesArrowVaporWave
    Posted at 20:43h, 24 May

    Thank y'all for this – absolutely brilliant. I'm off to measure the coastline now – with fine granularity. vigilanti semper

  • Very Stable Genius
    Posted at 20:43h, 24 May

    Konstanopolus profiting from the Antonopolus-like name I guess? 😀

  • Dylan Wade
    Posted at 20:43h, 24 May

    Try to justify your $90 trash tshirt all you want guys. Pathetic

  • Ignacio Echevarría
    Posted at 21:24h, 24 May

    best one

  • Dustov Stroganov
    Posted at 22:00h, 24 May

    glad humans like this exist. metta.

  • Marius Buciuman
    Posted at 23:36h, 24 May

    These brains together are worth over 1Billion $

  • Xuan Cheng
    Posted at 01:05h, 25 May

    Most wise investors with crypto uses the opportunity of when there is a drop in the market to buy and day trade with a working strategy and a plan to navigate the market system using the low price in the market to trade daily speculating the increase in price. Get a working plan today for that profit-making. fact is, BTC is the future of crypto and the questions traders ask themselves now is if this is the right time to invest ? Before jumping into a conclusion I think you should take a look at things first,for the past few days the price of BTC has been fluctuating which means the market is currently unstable and you can't tell if is going bearish or bullish. while others still continues to trade without fear of losing, others are being patient. For me trading has been going well because I use a day trading system that helps me with signals which have made me to accumulate over 8.5btc in two weeks.get a working strategy with the help of an expert Jason Koch. his telegram (@crypto4koch) for Crypto related issues.;).,

  • Dufftata
    Posted at 05:10h, 25 May

    which band is it on the wall?

  • Techonsapevole
    Posted at 10:28h, 25 May

    Thanks, impressive episode!

  • guillercomet
    Posted at 13:50h, 25 May

    I suspect Ryan and David are the same person. I bet you have never seen them both in the same room.

  • Brad Park
    Posted at 17:22h, 25 May

    Solana's PoH system is supposed to solve MEV

  • Mr Bojangles
    Posted at 18:54h, 25 May

    This is pretty far out. Like the comparison of miners and brokerages extracting value

  • Aaron Ellis
    Posted at 21:53h, 25 May

    these guys have never mentioned HEX, makes no sense for a show called bankless

  • J
    Posted at 00:13h, 28 May

    Insanely big brained chat