ZuBerlin · Jun 13, 2024

Clip In this video, a speaker from Flashbots discusses the implications of pre-confirmations on the MEV (Maximal Extractable Value) supply chain within blockchain transactions. They explore how pre-confirmations can provide a degree of finality to transactions before consensus confirmation, which is beneficial for user experience and synchronous composability. However, they note that this complicates reasoning about MEV. The speaker introduces a model where pre-confirmations are seen as part of both layer 1 and layer 2 sequencing, with new rules and an increased number of transactions to order. They ask critical questions about who will determine transaction ordering in this new context and the potential second and third-order effects on Ethereum's MEV supply chain. The discussion moves on to transaction sequencing in layer 2, currently managed by centralized sequencers, and the trust issues that arise from this setup. The speaker suggests that we may see delegation to professional parties and private mempool mechanisms as solutions. They also cover layer 1 sequencing, where inclusion pre-confirmations could change the dynamics of MEV auctions within the market. The speaker hypothesizes that these developments could lead to a convergence on a few large block builders due to exclusive order flow deals. Towards the end, they introduce Swarv—a platform for secure and private