133 - Flashbots Saves Crypto with Stephane Gosselin

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Aug 22, 2022

Stephane Gosselin, the founder of Flashbots, dives deep into the critical issue of Maximum Extractable Value (MEV) in the crypto landscape. He explains how MEV poses significant risks, including unethical practices like front-running. The conversation reveals Flashbots' innovative solutions aimed at mitigating these challenges and fostering a more decentralized ecosystem. Gosselin discusses the implications of MEV on Ethereum's future and highlights the importance of promoting competition and sustainable practices in the evolving blockchain world.

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INSIGHT

MEV: A Centralization Risk

MEV (Maximum Extractable Value) is a centralization risk for crypto.
Blockchains must consider MEV in their designs to avoid negative externalities.

INSIGHT

Good MEV vs. Bad MEV

Good MEV, like arbitrage, can help DeFi ecosystems by balancing liquidity pools.
Problems arise when protocols don't account for MEV in user interactions, leading to worse prices.

INSIGHT

MEV Dystopia vs. Utopia

Ignoring MEV can lead to a dystopian future with centralized control and censorship.
Solving MEV promotes a utopian future, preserving blockchain's permissionless nature.

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Stephane Gosselin is the Founder of Flashbots, an R&D organization that’s trying to fix the most pernicious problem in crypto—the problem of MEV (Maximum Extractable Value).

Many of us are massively optimistic about crypto and aren’t worried too much about its future. However, this MEV thing could be our achilles heel.

On this episode, we dive into what Stephane and his team are doing to make MEV less of a potential weak point, how MEV works, and what our industry would look like if Flashbots didn't exist. And of course—so much more.

This is another fundamental Bankless episode that you won’t want to miss.

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------ Topics Covered:

0:00 Intro 9:28 MEV Explained & Its Importance 13:35 The Evil Side of MEV 21:26 MEV Utopia vs. Dystopia 28:54 Competitiveness, Market Structure, Equilibrium 32:10 MEV Supply Chain Crashcourse 37:24 Timeline 38:56 Flashbots Thesis 42:31 No MEV Geth Scenario 45:15 Flashbots Continued 49:10 Solutions 51:15 MEV Boost 1:00:18 MEV Boost Adoption 1:05:10 Differences in Staking APY 1:08:20 Flashbots Incentives 1:12:57 Infinite Problems to be Solved? 1:14:35 PBS 1:17:54 Relayer Role 1:20:05 Weird MEV Potential Merge Issues? 1:22:40 Byproducts of MEV Boost 1:27:17 New Builder Market Speculation 1:31:15 Stephane’s Optimism 1:32:55 Closing & Disclaimer

------ Resources:

Stephane Gosselin https://twitter.com/thegostep

MEV-Boost in a Nutshell https://boost.flashbots.net/

Flashbots Blog Posts https://writings.flashbots.net/writings

Guide to Ethereum Roadmap https://newsletter.banklesshq.com/p/guide-to-the-ethereum-roadmap-jon#details

Ethereum’s Hidden Power Structure https://newsletter.banklesshq.com/p/125-matt-cutler#details

----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research.