techfeudalist on Nostr: ➡️ Can you elaborate on how they increase mining centralization? I’m getting a ...
➡️ Can you elaborate on how they increase mining centralization?
I’m getting a crazy sense of deja vu given that we’ve been discussing this for the last week.
CTV has the risk of promoting private out of band payment to miners, which can create centralizing MEV.
[1] Peter Todd admitted that CAT / CTV potentially encourage out-of-band fee payments to miners:
https://petertodd.org/2024/covenant-dependent-layer-2-review
[2] Matt Corallo explains why private out of band payments can motivate miner centralization:
https://x.com/TheBlueMatt/status/1780558009841643833
I pointed out that Peter identified one case but missed other cases.
Our long thread is here:
I’m getting a crazy sense of deja vu given that we’ve been discussing this for the last week.
CTV has the risk of promoting private out of band payment to miners, which can create centralizing MEV.
[1] Peter Todd admitted that CAT / CTV potentially encourage out-of-band fee payments to miners:
https://petertodd.org/2024/covenant-dependent-layer-2-review
[2] Matt Corallo explains why private out of band payments can motivate miner centralization:
https://x.com/TheBlueMatt/status/1780558009841643833
I pointed out that Peter identified one case but missed other cases.
Our long thread is here:
quoting note1yur…dpzqThanks for the response!
Yes, it’s not clearly worded, but I think he’s saying that for small CTV transactions, it might be more expensive to use CPFP than to make a private OOB payment to a miner. And he calls this a potential problem.
I think he’s glossing over a lot, but before we get to that, let’s do a quick sync on terminology so we can make sure we’re on the same page.
Payments to miners can be public or private. A public payment is broadcast to the entire miner network and the winning miner receives it. These public payments are perfectly fine and have no risk. The key is that every miner has access and competes on hashrate as per the incentives of the mining network.
Your example of a forced lightning closure is a good example of a public payment. CPFP is another. I have no issues with publicly broadcasted presigned transactions. I agree that these aren’t risky. (And package relay is awesome too.)
Private OOB payments are the risky ones. These are payments made via private APIs to a large miner to submit or to reprioritize a transaction.
Eg, MARA’s Slipstream API:
https://x.com/JStefanop1/status/1760764664651133162
These private OOB payments create centralizing incentives. The larger miners make disproportionately more revenue than smaller miners. The greater the private revenue opportunities, the fewer the number of miners we can expect to have.
Do you agree with the distinction between public and private payments to miners?
We can chat about that more, or we can chat about why CTV has the potential to create those risky private OOB payments.