EPF Update 1

This is my first in a series of weekly updates as a part of the Ethereum Protocol Fellowship (Cohort Three), since these are weekly, I'll keep them short and sweet.

My first week was devoted to exploring possible research topics related to MEV. I went into this week with a pretty rudimentary understanding of MEV, but I just enough to know I wanted to dig deeper into the rabbit hole.

I spent this week reading material from flashbots and Alex Stokes to get a base level understanding of the future of MEV, particularly In Protocol Proposer Builder Separation (IPPBS) and the implications of builder centralization. I was pretty much trying to get a better understanding of the problem. TLDR: delegating block-building to an off chain "builder market" could cause a nasty flywheel that will inevitably weaken Ethereum's censorship-resistant properties.

There's a set of probabilistic outcomes if we continue with the current state of PBS. A few of these outcomes are: 1. Since the builder market inherintly has economies of scale, they will become more powerful overtime, centralize, and gain in-protocol influence by owning validators (from their builder profits) 2. Builder centralization will lead to censorship at the builder-level and possibly the network level. In the short term, IPPBS is good for the dominant builder in the short term, but will fragilize the network in the long term.

Oookay, so MEV and PBS is clearly an important problem to solve. What does the thinking around these problems look like right now? I've skimmed over a few popular solutions proposed by Alex Stokes, Vitalik , and Barnabe. Right now the leading design is Two Slot PBS, but there are ideas like PEPC, and ideas like Partial Block Auctions that I need to dive deeper into the future.

This next week i'll dive deeper into the current research around PBS, and parse through some of the code revolving IPBPS. By the end of the I want to have a better understanding of what I want my research to focus on.

Research Topics?

Censorship resistance schemes
Decentralizing the builder role; This needs to keep the decentralized builder competitive vs a centralized builder
Building in a mechanism so that validators can still propose their own block or augment their own block
Reduce incentives for validators and block builders to integrate
Ability to monitor the builder market as a whole -> put something in-protocol that signal whether the block was built locally or not
Partial Block Auctions