Gm! Uptober is never late, nor is it early - it arrives precisely when it means to. As liquidity sloshed around in tight ranges this month, it finally made its way to slightly a greener land, despite some crushing earnings releases by some TradFi companies. Unprecedented times we live in where multi-billion dollar companies like Meta and Amazon trade like some good ol’ shitcoins. But hey, at least Elon Musk, the self proclaimed Chief Twit, bought the bird app!
With so much uncertainty in this market, one thing is guaranteed, markets are forward looking - every event is already priced in and will most certainly be in the future. Bet cautiously and accordingly for this sideways market.
Total Crypto Market Cap: $1.05T (6.06%)
DeFi TVL: $54.22B (-2.12%)
Stablecoins: $145.8B (-2.31%)
The process of generating blocks on the Ethereum network used to be well-known, however a number of its features changed on 15th September 2022 with the Merge. In particular, it came with support for outsourcing block building - Proposer/Block Builder Separation (PBS).
The theory behind outsourcing block building is that external parties may have requirements such as inclusion of specific transactions for which they are willing to pay a premium, but these transactions are sensitive in that if they were made available publicly their value to the external party would be significantly less. As such, validators are encouraged to sign blocks without knowing their transactions in return for the higher rewards. To obtain these outsourced blocks requires interaction with middlemen that on the one hand deal with those generating the transactions and the other on those signing the blocks - the MEV relays.
The decentralisation of the MEV supply chain is directly tied to its actors’ ability to redistribute MEV in a trustless manner. Without these systems in place, the network runs the risk of specialised actors entering into trusted coalitions and withhold revenues from end users. It's important to note there is no risk of a 51% attack as sometimes alluded on Twitter, “only” censorship on the transaction level. This doesn't mean all transactions are sanctioned, just that they will take longer to get into the network given that the network just needs 1 honest block proposer.
With this thought in mind let's dive into some data regarding the current censorship landscape: MEV-boost - the relay network launched by Flashbots that facilitates trustless communication between validators and block builders - is currently used by 67% of all validators.