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I just had to laugh at this one: > Maybe the shadiest form of these deals comes from the public equity markets from a no-fees online broker Robin Hood and its

by tkfu 4y ago

I just had to laugh at this one: > Maybe the shadiest form of these deals comes from the public equity markets from a no-fees online broker Robin Hood and its Payment For Order Flow (PFOF) because of the conflict of interest of a broker making more profit when it is "saving in customer transaction fees." > > In decentralised markets, such shenanigans do not exist. MEV is an extremely well-known, well-studied empirical phenomenon that happens today and does not have a known solution, and it's exactly analogous to front-running. It's especially funny that you put out this blog post almost exactly on the 3rd anniversary of the publication of the Flash Boys 2.0 paper. What I want to know is, are you just ignorant of MEV-related problems, are you trying to mislead your readers, or do you have some sincerely-held belief that MEV front-running is somehow morally okay in a way that PFOF isn't?

miohtama 4y ago
Thank you for a good insightful comment. You are incorrect, I have a sincerely-held belief MEV is not ok and your assumption what I do believe is wrong. I am well aware of MEV issues, as I have been developing for Ethereum for the last 6 years or so. They hurt me as a user as well. However, due to the already long post, I decided not to include them in this post and hope to write a comparison in the future. As you said, the comparison could be really interesting. I believe MEV hurts the ecosystem overall. It is wrong, but I know it can be technically solved, as opposite to solved with regulation, on multiple levels. Some of the current solutions include e.g. - Avalanche commit and reveal subnet - Short-term auctions like Cowswap Basically, everything where you can wait for a better trade execution effectively counters some of HFT issues, both in traditional and crypto world. You can always decide which price you are willing accept and then just wait for it. Unfortunately Ethereum 1.0 generation AMMs and swaps are not built this in mind, because they come from the era when MEV was not an issue yet. But as I said, this is being addressed in the next generation of the technology. Also unlike on stock markets, as a user you have more transparency on the execution so you can verify that you did not get screwed over (unlike with Robin Hood).

by tkfu 4y ago

miohtama 4y ago

Thank you for a good insightful comment. You are incorrect, I have a sincerely-held belief MEV is not ok and your assumption what I do believe is wrong. I am well aware of MEV issues, as I have been developing for Ethereum for the last 6 years or so. They hurt me as a user as well. However, due to the already long post, I decided not to include them in this post and hope to write a comparison in the future. As you said, the comparison could be really interesting. I believe MEV hurts the ecosystem overall. It is wrong, but I know it can be technically solved, as opposite to solved with regulation, on multiple levels. Some of the current solutions include e.g. - Avalanche commit and reveal subnet - Short-term auctions like Cowswap Basically, everything where you can wait for a better trade execution effectively counters some of HFT issues, both in traditional and crypto world. You can always decide which price you are willing accept and then just wait for it. Unfortunately Ethereum 1.0 generation AMMs and swaps are not built this in mind, because they come from the era when MEV was not an issue yet. But as I said, this is being addressed in the next generation of the technology. Also unlike on stock markets, as a user you have more transparency on the execution so you can verify that you did not get screwed over (unlike with Robin Hood).