ETH Research: Post-MEV-Burn simulations and statistics

原文标题：《In a post MEV-Burn world - Some simulations and stats》

Originally written by @Nerolation, Ethereum Research

Compiled by Kaori, BlockBeats

TL; DR:

• In the past, miner profits have exceeded Ethereum's intrinsic consensus layer rewards, making miner profits the main economic incentive to participate in Ethereum consensus.
• MEV Burn will result in approximately 90% of miner profits currently flowing to validators being burned, taking into account unchanged bid dynamics; In the last two months, the amount of Ethereum that will be burned reaches 35, 000 ETH.
• The proposed median MEV profit per block could be reduced from approximately 0.05 ETH to approximately 0.002 ETH, a 96% reduction.
• MEV-Burn may reduce absolute inequality in MEV payments/profits, but increase relative inequality.
• Although lotteries greater than 10 ETH (MEV lotteries) have become very rare (assuming the slot time and Δ time d < 2 are not changed), we still see prize pools greater than 1 ETH on a regular basis.
• Setting the delta time d between the payload base cost and the end of the time slot may have a linear relationship. A higher d results in a relatively high MEV burn tip for validators.

How does MEV-Burn work?

MEV-Burn has been proposed as an add-on to ePBSs, an attempt to address the negative externalities associated with MEVs and PBS.

MEV-Burn aims to solve several problems. First, validators are overpaid for completing security tasks; Second, the unpredictable and sporadic nature of the rewards generated by MEVs and the economic dynamics associated with them.

MEV-Burn determines the load base charge by setting a fixed cut-off time within a time slot. For a specific number of seconds within that time slot, the highest bid becomes the payload base charge and is then destroyed. The highest yield value observed before the cut-off time is destroyed, and the difference between the highest value at the end of the time slot and the part burned is paid to the validator as a MEV-Burn tip.

Other validators are watching and will only confirm blocks that match their local perception of the minimum base fee. There is also a time interval d to ensure that everyone has enough time to determine the maximum bid before the deadline. With MEV-Burn, the development of time slots looks like this:

! [ETH Research: Post-MEV-Burn Simulations and Statistics] (https://img-cdn.gateio.im/webp-social/moments-7f230462a9-987ca9e551-dd1a6f-69ad2a.webp)

As usual, from second t 0 (the moment the block builder observes the latest block), the block builder starts building at the nearest head of the chain. At the t2nd second of the time slot, the proposer chooses the most valuable bid that brings them the most benefit.

The change introduced by MEV-Burn is that the highest bid value observed at t second 1 of the time slot will be burned. This destruction is enforced by the protocol, and such a valid block must always burn the amount of ETH recognized by the majority of the provers of the current era.

! [ETH Research: Post-MEV-Burn Simulations and Statistics] (https://img-cdn.gateio.im/webp-social/moments-7f230462a9-81c13af865-dd1a6f-69ad2a.webp)

So, in time slots, block builders bid to the second t2. Then, at the second t2 moment perceived by the witness, the witness checks the highest bid as of the first t1 and remembers the value. Next, witnesses will only witness blocks that are at least the lowest payload base fee Burn it perceives.

In a world where ePBS is implemented, block builders submit their bids to a public pool of bids. The Upcoming Proposer and Witness Committee for Upcoming Time Slot is particularly concerned about the payload base cost determined at D sec before the end of the time slot. Witnesses to upcoming time slots perform Burn by only witnessing blocks that burn at least the payload base fee in their local view, at least the portion that burns what it considers to be the lowest.

Either the block is at least the amount that Burn the majority of witnesses recognize, or Burn nothing because it doesn't go into the canonical chain.

Visual data analysis

The chart below shows the amount of ETH that will be burned after implementing MEV-Burn (blue), and the MEV-Burn tip (orange) that will still be allocated to the proposer.

! [ETH Research: Post-MEV-Burn Simulations and Statistics] (https://img-cdn.gateio.im/webp-social/moments-7f230462a9-8f14e91d7c-dd1a6f-69ad2a.webp)

The chart shows that about 10% of MEVs currently flowing to validators will continue to flow to validators. The remaining 90% will be destroyed, which will benefit the entire ETH holder.

Based on the cumulative data for the past two months, the situation is as follows:

! [ETH Research: Post-MEV-Burn Simulations and Statistics] (https://img-cdn.gateio.im/webp-social/moments-7f230462a9-5eb8b9ab5c-dd1a6f-69ad2a.webp)

Impact of MEV-Burn

The figure below uses a Lorentz curve to visualize the difference between MEV-Boost payments and MEV-Burn tips. These curves are often used in economics to account for income inequality among the population. Here, we can use them to effectively demonstrate the uneven distribution of MEV benefits among validators.

In this initial step, I sort the MEV payments from smallest to largest and plot the cumulative sum to validator ratio. The x-axis shows the cumulative percentage of validators, and the y-axis shows the cumulative share paid by MEV.

The "equality" line indicates an ideal scenario where MEV payments are evenly distributed among validators – for example, 50% of validators receive 50% of MEV payments. The greater the deviation from the equality line, the higher the inequality of payments.

! [ETH Research: Post-MEV-Burn Simulations and Statistics] (https://img-cdn.gateio.im/webp-social/moments-7f230462a9-a98ae1e307-dd1a6f-69ad2a.webp)

The figure above shows that in the existing MEV-Boost system and the MEV-Burn world, the payment gap between block producers is large. In fact, with the introduction of MEV-Burn, the relative inequality of additional gains for block producers will increase. However, in absolute terms, with MEV-Burn, most of the total MEV payments are destroyed in a time slot, reducing inequality.

It is worth noting that as absolute payouts decrease, their impact on the total validator reward (CL reward + EL reward, where EL reward = MEV payout) also decreases. This is very ideal.

A lower absolute amount is beneficial to reduce the incentive to conduct a DoS attack on a block producer in order to steal MEV profits from that block producer. Additionally, this may allow staking pool providers like Rocketpool to lower their minimum staking while blocking "rug-pools".

The chart below shows the share of rewards that validators receive for performing individual tasks over time. The image above shows the distribution of rewards under the current MEV-Boost setup, while the figure below shows what the reward distribution will look like in the post-MEV-Burn world. Assume that the delta time d is 2 seconds.

! [ETH Research: Post-MEV-Burn Simulations and Statistics] (https://img-cdn.gateio.im/webp-social/moments-7f230462a9-e137f8c134-dd1a6f-69ad2a.webp)

Although the impact of MEV on validators' regular rewards has decreased, large-scale lotteries affected by events may still happen as they do now in the last d seconds after determining the load base fee.

If the load base fee is set relatively low and a significant MEV opportunity occurs in the last d seconds of the time slot, the MEV-burn tip may significantly exceed the load base charge. This can result in larger proposers being paid, but only a small fraction of them go to Burn.

MEV lotteries may become smaller depending on the substantial MEV chances resulting from events in a single time slot, but they will not disappear completely.

The chart below shows the decrease in MEV profits for validators. Median MEV profit decreased by 96% from 0.05 ETH to 0.002 ETH.

! [ETH Research: Post-MEV-Burn Simulations and Statistics] (https://img-cdn.gateio.im/webp-social/moments-7f230462a9-c88a3cb7de-dd1a6f-69ad2a.webp)

Over the past 60 days, we have observed some anomalous data, with a total of 177 blocks with MEV-Boost payments exceeding 10 ETH. Assuming a delta time (d) of 2 seconds, we would still have 19 blocks of MEV-Burn tips over 10 ETH paid to the proposer. Nevertheless, the absolute number of these huge prizes will be significantly reduced.

! [ETH Research: Post-MEV-Burn Simulations and Statistics] (https://img-cdn.gateio.im/webp-social/moments-7f230462a9-e856a430c3-dd1a6f-69ad2a.webp)

Perfect incremental time

The increment seconds d introduces a synchronization hypothesis whose values can be adjusted to find a balance between synchronization between prover and MEV maximizing Burn.

Setting the incremental time between payload base charges d must be chosen carefully:

• It must be long enough to allow provers to agree on a common base fee, ensuring that all validators see bids in a timely manner.
• It must also be short enough to ensure that a sufficient number of MEVs are burned. If we assume that MEV increases linearly within one time slot and d is 2 seconds, then each time slot burns 5/6 of the MEV.

The graph below plots the percentage of Burn MEV at different d settings over the last 60 days.

The image above shows the effect of d on the MEV Burn tip, and the figure below shows the effect of d on the payload base cost, called "MEV Burn".

! [ETH Research: Post-MEV-Burn Simulations and Statistics] (https://img-cdn.gateio.im/webp-social/moments-7f230462a9-22e0207b88-dd1a6f-69ad2a.webp)

We can see that setting d to 1 second causes 90% of the MEV payments to be destroyed and the remaining 10% to go to the proposer. When d is 2 seconds, 80% of the total will be destroyed.

Bypassability and Collusion

Much like the current ePBS design, MEV Burn may be affected by Bypassability. Collusion between block builders and validators can effectively deactivate Bypassability.

There are concerns that large block builders may establish private connections with validators (for example, by establishing private relays). The payload base fee will then be set at an excessively low level.

At a minimum, a competitive block builder is required to establish a payload base fee for all block builders.

There is an argument that block builders will not abandon public bid pools (perhaps validators are only looking for there) for security reasons and use them in parallel with private channels.

In my opinion, the reaction of block builders is not 100% clear.

We may see the same situation as today's MEV-Boost:

Large block builders do not commit to the public bid pool, risking validators missing out on their bids. We see the same situation in MEV-Boost, where large block builders start bidding relatively late in the time slot, risking validators requesting blocks early compared to smaller block builders, and they miss the opportunity.

Original link