The MEVconomics of bridging - James Prestwich

Introduction

In this section, James introduces himself and the topic of his talk. He explains that he will be discussing a specific mitigation within the context of bridging, which involves using the structure of a bridge and partially ordering messages to mitigate MEV (Maximal Extractable Value) in cross-chain bridging.

Introducing Bridging and MEV Mitigation

• James introduces himself and explains that he will be discussing a specific mitigation within the context of bridging.

• He provides an overview of how bridges work, with two one-way communication channels between blockchains.

• James explains that there are time gaps between actions in the bridge process, which can lead to MEV.

• He notes that cross-chain bridging is particularly vulnerable to MEV due to long time gaps between chains.

Understanding MEV in Cross-Chain Bridging

In this section, James delves deeper into how MEV works in cross-chain bridging. He explains how early access to information is key for extracting value from transactions and discusses how reordering and sandwiching can impact cross-chain messages.

How Early Access to Information Impacts Cross-Chain Bridging

• James explains that early access to information is key for extracting value from transactions.

• He notes that cross-chain bridging provides 10 minutes advanced warning on what a message does before it gets acted on by the remote chain.

• This allows people to front run messages effectively, leading to more opportunities for MEV.

Reordering and Sandwiching in Cross-Chain Messages

• James discusses how reordering and sandwiching can impact cross-chain messages.

• He notes that MEV pushes the ordering of a blockchain towards the maximally extractable ordering, which provides the most value to the searcher, builder, proposer supply chain.

• James explains that reordering and sandwiching can be mitigated by changing the message flow in cross-chain bridging.

Mitigating MEV in Cross-Chain Messages

In this section, James discusses how to mitigate MEV in cross-chain messages. He explains how batching messages on the sending chain and committing to a batch rather than individual messages can preserve relative ordering and prevent insertion and reordering.

Batching Messages on the Sending Chain

• James explains that instead of immediately dispatching to the other chain, we should accumulate on the sending chain a batch of messages that touches the same application or state.

• Rather than committing key to each individual message, we want to commit to a batch.

• This preserves relative ordering of those messages and prevents extraction of value by reordering or inserting within the batch.

Conclusion

James concludes his talk by summarizing how batching messages can mitigate MEV in cross-chain bridging.

Shuffling Messages for Cross-Chain Communication

In this section, the speaker discusses how shuffling messages can be used to increase the cost of extraction in cross-chain communication.

Using Shuffling to Increase Cost of Extraction

• A deterministic but difficult-to-predict ordering can be used to shuffle messages based on the block hash of the destination chain.

• Shuffling messages using bad randomness makes it more expensive for searchers to extract Mev.

• Searching shuffled batches becomes a proof-of-work problem that increases the cost of extraction.

• The use of bad randomness mitigates specific extraction from cross-chain messages and makes it less profitable for searchers to manipulate.

Pros and Cons of Shuffling Messages

• This method is easy to implement with very little on-chain overhead.

• It mitigates specific extraction from cross-chain messages but does not prevent it entirely.

• It requires significant throughput and only works if several messages touch state so that shuffling changes their outcome.

• Some applications may want a specific ordering, which this method does not preserve.

Roll-Ups and Bridges in Cross-Chain Communication

In this section, the speaker discusses Roll-Ups and bridges in cross-chain communication.

Defining Roll-Ups and Bridges

• Roll-Ups definitionally include a bridge to layer one, but there is debate about whether the bridge or nodes determine the correct state of a roll-up.

• The speaker believes that nodes decide what the state of a roll-up is because they cannot be forced to accept an invalid block, but the bridge can be forced to accept anything.

Mev and Cross-Chain Communication

In this section, the speaker discusses how Mev is a risk involved in cross-chain communication.

Mev in Cross-Chain Communication

• Cross-chain Mev is almost exclusively statistically limited and involves multiple transactions.

• Mev is the cosmic background radiation in cross-chain communication that goes from everywhere to everywhere all at once.

• The speaker jokingly mentions "meconomics" and concludes their talk.

Introduction

The speaker introduces the next talk and thanks the previous speaker for their presentation.

Speaker Introduction

• The speaker welcomes everyone to the event.

• They thank the previous speaker for their presentation.

• The next talk will be about restating an MAV.