As a researcher with a background in blockchain and decentralized finance, I find the initiatives proposed by Marinade Finance to address MEV on Solana highly commendable. The focus on maintaining decentralization, transparency, and innovation aligns closely with my own values and experiences in this field.
The decentralized finance (DeFi) platform on Solana, known as Marinade Finance, has put forth several governance suggestions with the goal of controlling excessive Miner Extractable Value (MEV) for maintaining a decentralized and secure ecosystem.
On December 11th, Marinade Finance shared their governance proposal titled “Addressing Malicious Validators and Empowering MEV on Solana” within the Marinade community forum. This Solana-associated, non-custodial liquid staking protocol is seeking input from its community about a series of proposals intended to handle MEV (Maximal Extractable Value) management.
In simpler terms, MEV (Maximal Extractable Value) represents the worth derived from strategically arranging transactions in a blockchain network. Marinade perceives MEV not just as a difficulty but also as a potential advantage or opportunity.
MEV (Maximal Extractable Value) can boost the network’s performance by optimizing liquidity, enhancing price discovery, and remunerating validators. Yet, if left unregulated, MEV could make the ecosystem susceptible to sandwich attacks, pre-emptive trading, and potential centralization risks.
In a message to crypto.news, Michael Repetný, CEO of Marinade Finance, underscores the significance of upholding decentralization, transparency, and progress within blockchain technology. Consequently, he thinks tackling issues related to malicious validators and MEV (Miners Extract Value) is essential for the well-being and longevity of the Solana network.
As a researcher at Marinade Labs, I acknowledge that Maximal Extractable Value (MEV) may not be completely eradicable, but we believe in effectively managing its influence and ensuring fair distribution of its worth.
Repetný clarified that during a recent auction marketplace at Marinade, validators had an opportunity to make bids significantly above the usual standard for rewards on Solana due to the system’s openness and transparency. However, without adequate data, he noted that the team was finding it difficult to distinguish between legitimate validators and those engaging in malicious MEV activities without proper evidence.
It turns out that other studies support what we’ve noticed. These studies suggest that the worth of these negative Market Efficiency Externalities (MEV) isn’t just increasing, but it’s becoming more concentrated in fewer hands rather than spread among numerous parties.
Repetný.
In the discussion, Marinade Labs outlined a solution for dealing with MEV by focusing on methods that minimize detrimental MEV and distribute unavoidable MEV via open marketplaces. This is achieved by establishing a transparent oversight committee responsible for overseeing validators, with the primary objective being to reduce harmful actions.
The group will focus on finding validators who have been demonstrated to engage in damaging behavior. Once these problematic validators are identified, the committee plans to sever their Proof of Stake agreement (PSR bond) as a means of deterring similar misconduct among other validators and safeguarding the network.
The second proposal is reopening the public mempool in order to decentralize access to MEV. The staking protocol argued that the distribution of MEV opportunities in public mempools is much fairer compared to private mempools that risk centralizing the deal flow.
The last suggestion we have is focusing the resources from Marinade DAO or MNDE DAO towards studying Solana’s Maximal Extractable Value (MEV) aspects. This research will examine trends, potential risks, and opportunities related to MEV, as well as strategies for minimizing detrimental MEV effects. Additionally, we aim to create tools that enhance the transparency and inclusivity of MEV.
The results of our study will help shape future administrative choices and drive advancements within the Solana network.
Repetný stated research on MEV should be the first priority for the Solana ecosystem as it will help developers to identify the problem and mitigate MEV.
Investing in MEV research for a clearer understanding of the issue, including identifying which platforms are most affected by detrimental MEV, measuring the extent of the problem, and compiling relevant studies such as “A sandwich-resistant AMM” into a practical guide on how to minimize the harmful consequences of MEV.
Read More
- AI16Z PREDICTION. AI16Z cryptocurrency
- Crypto ETPs hit $44.5b in YTD inflows amid Bitcoin surge
- POL PREDICTION. POL cryptocurrency
- Hong Kong Treasury says crypto is not a ‘target asset’ for its Exchange Fund
- Li Haslett Chen to Leave Warner Bros. Discovery Board
- ‘Kraven the Hunter & ‘Madame Web’ Box Office Disaster Blamed on Media Scrutiny
- EXCLUSIVE: Alia Bhatt in talks with Dinesh Vijan for a supernatural horror thriller; Tentatively titled Chamunda
- Shiba Inu, Bonk, Pepe prices rebound: Beware of dead cat bounce
- Crypto x AI makes up just 1% of crypto market cap, says analyst
- Blockaid new dashboard to track Web3 activity and threats
2024-12-11 22:11