mistX and the Power of Flashbots
The early Alchemists noted in their largely cryptic manuscripts that in order to demonstrate the evolution of the Universe in a single lab experiment several secret ingredients would be required, mixing these chemicals in a specific fashion would open a gateway to the fountain of truth. Recently one of these ingredients was discovered and made available to the public — mistX.io — an exchange built on Flashbots technology.
Flashbots is a research and development organization dedicated to bringing awareness to the current MEV crisis and finding solutions. One of the projects that Flashbots has launched puts a direct spotlight onto the MEV crisis: MEV-Explore. It is a public dashboard and live transactions explorer of MEV activity, allowing users to see the sheer magnitude of the financial damage that MEV causes.
mistX.io enables end users to send transactions through Flashbots bundles
The second project Flashbots launched is Flashbots Core. It is a proof-of-concept communication channel between ‘miners’ and ‘Searchers’ for transparent and efficient MEV extraction. This second project is what mistX is built on.
Flashbots Core involves in a series of events:
‘Searchers’ send Flashbots ‘bundles’ to MEV-Relay.
There are a lot of roles in this process so let’s explore them.
‘Searchers’ can be a number of various individuals, organizations, bot operators, dApps, etc. In this case, mistX.io acts as the searcher in the chain of events. Flashbots connects mistX directly to miners and allows them to avoid the Ethereum mempool.
If a searcher has transactions they want to send to a miner, the searcher must craft a ‘bundle’. Bundles are how searchers communicate with miners. Bundles are groups of transactions executed in the order they are provided. The entire bundle must be executed or none of it will be.
A bundle contains:
-One or several transactions that can be the searcher’s and/or other users’ pending transactions from the mempool
-A sealed tip that is paid by the searcher to the miner via a smart contract
Bundles have these properties:
- Bundles are very sensitive to ordering
- Flashbots bundles will always be at the top slot of the block
These properties are what make Flashbots tech so successful. If the bundle exists at the top slot of the block, no other transactions can come before the bundle. Thus, preventing front-running and of course, no possibility of sandwiching, simply amazing when you think about it.
MEV-Relay receives bundles and sends them to all whitelisted MEV-Geth miners
These bundles are sent to Flashbots’ MEV-Relay. MEV-Relay is a transaction bundle relayer. MEV-Relay simulates every bundle that is passed through and filters out any invalid bundles and/or bundles that are not competitive in terms of paying below market rate for gas. If there are no errors, MEV-Relay will forward the bundles to the miners.
Miners receive Flashbots bundles from MEV-Relay and processes them in MEV-Geth
While there are no longer any criteria to be onboarded as a Searcher, miners that want to participate in the Flashbots core project must go through a screening before getting whitelisted. This may change in the future. Miners that participate in Flashbots core have the ability to evaluate bundles based on their profitability and choose them accordingly.
MEV-Geth picks the most profitable bundle out of all bundles it is sent.
MEV-Geth then compares the block that includes this bundle with a vanilla block that does not include any bundles.
If it is more profitable to include a bundle MEV-Geth will do so, but otherwise it will default back to a vanilla Geth block.
MEV-Geth is a modified fork of the Ethereum Geth client. Flashbots runs on MEV-Geth, which is an open-sourced sealed-bid block space. This serves as an auction mechanism for communicating transaction order preference. MEV-Geth essentially delegates the job of finding MEV opportunities to Searchers. This enables Searchers to find whatever they happen to be looking for at the time such as finding arbitrage, or token liquidation (or in certain cases frontrunning, backrunning, sandwiching, french toasting)
MEV-Geth ultimately allows Searchers to bypass the Ethereum mempool and provide privacy for their transactions. Searchers, like mistX.io save on gas fees by not having to worry about failed transactions
There are certain benefits to using MEV-Geth. The first of these is that the design is permissionless which means there is no trusted intermediary to censor transactions. The second of these is that the design is efficient which prevents unnecessary network congestion. Lastly, MEV-Geth accomplishes privacy for both pre-trades and failed trades. Pre-trades become transparent once they have been included in the block. Failed trade privacy prevents failed transactions from being included into a block which means no one will get to see them.
MEV-Geth ultimately allows Searchers to bypass the Ethereum mempool and provide privacy for their transactions. Searchers, like mistX.io save on gas fees by not having to worry about failed transactions. Miners receive additional revenue from the tip, in exchange for including the most profitable bundle in the block they mined.
Only when a searcher’s bundle is included in a block is the tip associated with their bundle paid.
If a bundle is not included it does not cost the searcher anything (i.e. no gas fees are paid for failed transactions)
The mistX implementation of Flashbots provides users with front-running protection and tip based transactions when trading with ETH, (while also democratizing MEV extraction for miners). This levels the playing field for miners competing for profit. Preventing consolidation of power and capital, which could otherwise be an existential threat to Ethereum’s core values: permission-less and decentralized access for everyone. Therefore, mistX.io, with Flashbots Core, is a step forward in illuminating the Dark Forest that is the Ethereum mempool.
Further, for every miner tip paid via mistX.io a portion is reserved to enrich the Aludel rewards pool that our Crucible NFT ties into on crucible.alchemist.wtf. Subscribing MIST-ETH LP via the crucible means that our Alchemists are rewarded when they trade on mistX.io.
Stay tuned for our next article “What every trader should know about Miner Extractable Value — the MEV crisis explained”.
In the meantime, use Sandwiched.wtf to check your trade history for sandwiched trades, learn more about MEV and share your delicious ETH Sandwiches with your friends.
Last modified 1mo ago
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