Andreas Park PRO
Professor of Finance at UofT
Under the Hood: Transaction Processing, MEV, and the Flashbots Protocol
Instructors: Andreas Park
Rotman – MBA
Transaction Processing
Transaction Visualization
transactions
decentralized applications
tokens
The
"Mem-Pool"
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A Simple Overview
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The reality is more complicated
Consequence 1: Extract Value from Users
"Ethereum is a Dark Forest"
Consequence 2: Excess Gas Prices ("Priority Gas Auctions")
Flashbots Protocol
Idea of Flashbots
Illustration
Transactions Send to Searchers
NB: the relay is a security measure: it has high capacity and can distinguish garbage from real transactions
Bundles come to Miners
NB: miners could still manipulate, front-run etc, but Flashbots monitors them and would cut them off if they misbehave
Is it used?
81% of validators have signed on with Flashbots (>880,000 total)
Does Flashbots Prevent MEV? No!
Does Flashbots Prevent MEV?
Flashbot 3.0 Transaction Privacy
By Andreas Park
This deck introduces some tech concepts including MEV