Transactions are being clamped, mining pools are behaving maliciously, do Ethereum miners have too much power?

Original title: "Transactions are clamped, mining pools are doing evil, do Ethereum miners have too much power?"

Original source: Odaily Planet Daily

Today, Gao Jin, the initiator of YFI I, posted a Weibo post saying: " A mining pool has personally intervened to squeeze people? Two 1wei ones squeezed one 125gwei one, which is unethical . The profit for a single transaction is 0.12 eth, and this account continues to squeeze people..." This caused heated discussions among onlookers.

From the block information, we can see that the two transactions mentioned by Gao Jin with a Gas fee of 1 wei "sandwiched" a transaction with a Gas fee of 125 Gwei, completing the arbitrage. According to the address query, the "evil" mining pool mentioned in the article that packaged the two transactions is UU Pool, which accounts for about 1.7% of the total computing power of the Ethereum network.

For a single arbitrage of 0.12 eth, many spectators may not find it anything new, but the possibility of "open" arbitrage by the mining pool is terrifying.

From being abused by bots to being abused by mining pools, the leeks are crying out in misery

If you are an investor who often uses DEX transactions, you must also feel the pain of being "trapped" when traveling in the dark forest of Ethereum.

The so-called "being trapped" means being front-runner. According to the Mppool packaging mechanism, generally speaking, miners sort and package transactions according to the gas price given by the transaction. In DeFi products, the order in which transactions are packaged profoundly affects their economic interests.

For example, in Uniswap , for two buy orders for a trading pair, the one that is executed first will receive more tokens. When an investor executes a transaction with a higher order amount, a larger slippage setting, and a lower Gas setting, it is easy to be "sandwiched". The Bot will send two transactions with higher Gas in the same time period, buy before you, and sell right after your order, "sandwiching" the investor in the middle, completing an arbitrage behavior of buying low and selling high, which can be said to be "risk-free" profit. Many traders may have never noticed that they have been silently being exploited.

However, trading robots are common arbitrage tools after all, and robots are not always successful. Other bots have also emerged to restrict these bots, and we have gradually become accustomed to the spiral iteration of new products. But "mining pools personally participate" makes people very uncomfortable, because the order of transactions determines the distribution of profits, and the miners have the right to decide the order of transactions, which can definitely be called a "dimensionality reduction attack."

Generally speaking, miners can adjust the order of transactions at will, and can even pack a transaction into a block directly without broadcasting the transaction. In other words, as long as a block can be produced, the order of transactions is in the hands of the mining pool, and such arbitrage can be said to be cost-free.

Previously, Ownbit founder Tan Guopeng wrote a very good article titled “The Dark Forest of Ethereum”: “In this game , ordinary users are blind players, arbitrage robots are open-eyed players, and miners are from a God’s perspective . Miners directly join this harvesting game and completely change the robot landscape. Once miners with a God’s perspective join the game, the result is predictable. Miners’ robots will drive out non-miner robots. And these miners will become the biggest dark force on Ethereum, using their power to wantonly harvest users!”

Will mining pool arbitrage become visible and regular?

The UU Pool involved in this arbitrage is not a top-ranked mining pool, and its block production rate is limited. It was discovered because the inversion and price difference of the gas fee are obvious at a glance, but it also makes us wonder if other larger mining pools have similar behaviors that we have not discovered? And, from different perspectives, is this considered "evil"?

Some people even say that will mining pool arbitrage be made public in the future? Mining itself is also a profit-seeking behavior, so it is not a bad idea to distribute profits to miners according to computing power?

In fact, in today’s era of DeFi, we have also seen a lot of research on MEV (Miner Extractable Value), which is “the value that miners can directly extract as profit from smart contracts ”. This includes regular profits from transaction fees and block rewards, as well as unconventional profits from transaction reorganization, transaction insertion, and transaction review.

We have to admit that there have been many changes between miners’ mining in the Layer 1 era and mining in the smart contract era. Simply put, the portraits of Bitcoin miners and Ethereum miners are very different.

Our inherent thinking is that miners should be paid from block rewards, while traders should profit from flexible trading strategies, but now, with the prosperity of Ethereum, has the role of miners changed, and can they use their position in the network to extract additional value from innovative products?

From the perspective of ordinary traders and ecosystem participants, Odaily Planet Daily believes that the answer is no.

It is quite simple, because we all expect that the crypto world is a place that is more open, fair, open and transparent than the real world. However, as the game of power on Ethereum becomes more public, we can’t help but feel confused. Who is making the rules? Who is restricting power? Who is drawing the bottom line for the game of interests?

What fascinates many ordinary investors about DeFi is that it is a "fair" game. Opportunity is paramount. Although the big players still have the final say, entrepreneurs and ordinary people also have many opportunities for "rebound" from the bottom up. The balance of power in the ecosystem is definitely a science. If the power of miners cannot be effectively restricted, we are worried that their role will change from "guardian" to "dark force" in the Ethereum ecosystem? Then the decay and decline of Ethereum may not be far away.