by @0xdabaojian
Thanks to @StanleyHe17, @DrewVdW, and @0xArhat for the feedback and discussion. Review ≠ endorsement.
This is the first article in a series exploring various out-of-protocol proposer commitment schemes on Ethereum. Throughout the series, we will delve into the mechanisms, challenges, and innovations that will shape how we design proposer commitments.
In this first installment, we aim to:
In decentralized systems, inefficiencies may arise as a result of independent actions taken without coordination - a phenomenon known as the price of anarchy. Centralized models might solve this issue through unified decision-making by a central authority, but at the cost of individual autonomy. Programmable blockchains, such as Ethereum, have emerged as technology that can trustlessly transform non-cooperative games into cooperative ones through credible commitment devices.
From Virgil Griffith’s “Ethereum is game-chainging technology, literally”
The Prisoner’s Dilemma depicts a scenario where the ratioinal strategy puts players into worst possible state. However, Ethereum can turn this into a cooperative game:
Let's say players A and B both put a million dollars into a smart contract before commiting a transgression, with the understanding that if they betray each other, their deposits get deducted. Under these circumstances, they would want to collaborate unless the police offer them more than a million.
In the original Prisoner’s Dilemma, logic leads to betrayal. But with a modified pay-off matrix via credible commitments, cooperation becomes logical.
From this perspective, Ethereum's value proposition is to offer credible commitment mechanisms that enable coordination without the need for a central authority.
At present, the most common method for credible commitments on Ethereum is through smart contracts. However, this approach has limitations, especially when it involves commitments that depend on exogenous conditions beyond the EVM. Certain types of commitments cannot be credibly established due to the opcode constraints of the EVM.
For instance, the EVM does not provide a mechanism for a proposer to commit to including a specific transaction deterministically. This is because there exists no EVM opcode that could query the historical EVM state given a block number to credibly prove whether a transaction was indeed included or not.
To establish such a commitment, an external out-of-protocol mechanism would be required.
Proposer agency, which refers to the proposer's independent ability to act, is crucial for Ethereum. This autonomy fosters independent decision-making and curbs centralized actors’ undue influence over transaction inclusion, thus promoting Ethereum's censorship resistance property. Additionally, proposer agency encourages diverse strategies for transaction inclusion. Rather than focusing on a single metric defined by either the priority fee or MEV, it enables novel cryptoeconomic primitives to be built around transaction inclusion. Last but not least, the most obvious benefit of proper commitment is that it generates an additional stream of revenue for the proposers.
After PBS, proposers have little influence over the contents of a block. Their role is reduced to choosing which relay's block header to sign. This change is justified because agency has a price - in terms of strategy sophistication and hardware requirement - that not all stakers could afford.
Through proposer commitments, the goal is to empower proposers without increasing significant operational complexity. Put simply, we want proposers to stay “dumb” but still have the ability to provide input on what goes into the block.