125 - Ethereum's Hidden Power Structures | Matt Cutler

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Jun 27, 2022

In this discussion, Matt Cutler, Co-founder and CEO of Blocknative, reveals his expertise on Ethereum’s evolving power structures as it transitions to proof-of-stake. He explains the roles of block builders and how they will change post-merge. Matt dives into Miner Extractable Value (MEV) and its implications for decentralization, discussing how users might be compensated. He emphasizes the importance of modular design and collective responsibility in shaping a more equitable transaction landscape for Ethereum's future.

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INSIGHT

Proof-of-Stake and Decentralization

Proof-of-Stake, through modularity, preserves decentralization, enabling diverse participation.
It allows anyone with a consumer-grade laptop to help secure the network.

INSIGHT

Mining Pools and Centralization

In Proof-of-Work, mining pools control block construction and thus transaction sequencing.
This centralization creates potential for manipulation.

INSIGHT

Miner Revenue Streams

Miners profit from block rewards, transaction (priority) fees, and MEV.
MEV arises from strategically ordering transactions within blocks.

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Matt Cutler is the Co-Founder and CEO of Blocknative and a gigabrain when it comes to Ethereum’s hidden power structures and all things blockchains.

As Ethereum approaches the merge, these power structures are going to change. What will this post-merge future look like? Will users get paid to use Ethereum?

Matt explains everything from first principles and it helps illustrate the complexities of everything discussed in this insightful episode. By the end of it, you’ll have a better understanding of the purpose of blockbuilders, the new post-merge roles, all things MEV, and so much more.

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------ Topics Covered:

0:00 Intro 6:27 The Reason for the Merge 10:07 The Values PoS Preserves 13:45 Blockbuilding Explained 16:35 Mining Pools & Incentive Categories 30:25 Why Decentralizing Power Matters 33:40 The Future State of Ethereum 39:21 The Post-Merge World Roles Explained 45:25 MEV Searchers vs. Blockbuilders vs. Stakers/Validators 55:45 PBS & MEV Boost & Who Are the Blockbuilders 1:03:50 Economic Rewards for Blockbuilders 1:17:19 Ethereum Will Eventually Pay Users? 1:19:40 Can Ethereum Stay Decentralized? 1:26:22 ETH The Asset 1:31:39 Where MEV Exists 1:35:16 How Blocknative Fits into All of This 1:37:30 Closing & Disclaimers

------ Resources:

Matt Cutler https://twitter.com/mcutler

Blocknative https://twitter.com/blocknative

End Game with Vitalik https://youtu.be/b1m_PTVxD-s

Ultra Scalable Ethereum https://newsletter.banklesshq.com/p/ultra-scalable-ethereum

The Guide to the Ethereum Roadmap with Jon https://youtu.be/xuLyZaty9iI

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