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SUAVE
Navigating the intricacies of the cryptocurrency ecosystem can be challenging, but understanding them is key to maximizing one's investment. With this in mind, let's explore the SUAVE protocol (Single Unifying Auction for Value Expression) and its implications for the broader blockchain landscape.
SUAVE, developed by Flashbots, is a pivotal development in the realm of mempools and block building solutions. It should be stressed that SUAVE is not a shared sequencer network, although it presents certain structural similarities that allow for potential synergies with such networks.
Central to the SUAVE protocol is its dual-layered structure. One layer is the SUAVE mempool, a messaging layer that collects and aggregates user transactions. The other layer is the SUAVE chain, a configuration layer that organizes these transactions into blocks. SUAVE can function on any blockchain, regardless of whether it is a Layer 1 or Layer 2 solution, allowing it to act as a multichain extension to the existing MEV-boost service.
When a blockchain implements SUAVE, two primary roles can be delegated - that of the mempool and the block builder. SUAVE enables users to leverage its mempool instead of the native blockchain mempool, while block builders can choose to use blocks constructed by SUAVE builders. The end goal of SUAVE is to maximize MEV (Maximal Extractable Value) opportunities for builders and searchers, enhance block reward revenue for validators, and safeguard users from MEV attacks, all while minimizing gas costs for transaction execution.
To understand the SUAVE process, it is helpful to break it down into three distinct phases: The Universal Preference (Transaction) Environment, the Optimal Execution Market, and Decentralized Block Building. In the first phase, user transactions are aggregated from each chain. In the second, the SUAVE mempool is explored to pinpoint the most efficient transaction execution options for users. In the final phase, block builders assemble these transactions to form blocks.
To illustrate how SUAVE works, let's assume that SUAVE is utilized on the Ethereum network. Ethereum users will submit their transactions to the SUAVE mempool. SUAVE builders will then consolidate these transactions within the SUAVE chain to generate an Ethereum block that optimizes MEV opportunities. Subsequently, Ethereum validators will assess both the blocks constructed by Ethereum builders and SUAVE builders and select the block with the higher MEV to include in the Ethereum block.
SUAVE is intended to provide an additional option for Ethereum validators rather than impose SUAVE blocks on rollups or require alterations to rollup fork selection rules. It merely supplies sequencers with the block offering the highest MEV. This point distinguishes SUAVE from a shared sequencer network, and from a rollup perspective, it may be feasible to utilize both SUAVE and a shared sequencer network. Here, the shared sequencer would act as a block proposer, while SUAVE serves as a block builder.
In addition to SUAVE, mev-boost is another Flashbots-designed protocol aimed at mitigating the negative effects of MEV on the Ethereum network. It consists of three key participants: relays, builders, and proposers. Relays are mutually trusted auctioneers connecting proposers to block builders. Builders are sophisticated entities constructing blocks to maximize MEV for themselves and the proposers, while proposers are Ethereum Proof-of-Stake validators.
The mev-boost sequence per block is as follows: a builder creates a block by receiving transactions from users, searchers, or other order flows. This block is submitted to a relay, which validates the block and calculates the proposer's payment. The relay sends a “blinded” header and payment value to the current slot's proposer, who evaluates all the bids they’ve received and signs the blinded header associated with the highest payment. This signed header is sent back to the relay, which then publishes the block using their local beacon nodes and returns it to the proposer. The rewards are distributed to the builder and proposer through transactions in the block and the block reward.
mev-boost is instrumental because it allows democratic access to MEV for all proposers without necessitating trusted relationships with builders or searchers. This approach contributes to Ethereum's long-term decentralization, strengthening the integrity and resilience of the blockchain ecosystem.
