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v0.3

Simple Summary#

Defines the construction and usage of MEV bundles by miners. Provides a specification for custom implementations of the required node changes so that MEV bundles can be used correctly.

Abstract#

MEV bundles are stored by the node and the bundles that are providing extra profit for miners are added to the block in front of other transactions.

Motivation#

We believe that without the adoption of neutral, public, open-source infrastructure for permissionless MEV extraction, MEV risks becoming an insiders' game. We commit as an organisation to releasing reference implementations for participation in fair, ethical, and politically neutral MEV extraction.

Specification#

The key words MUST, MUST NOT, REQUIRED, SHALL, SHALL NOT, SHOULD, SHOULD NOT, RECOMMENDED, MAY, and OPTIONAL in this document are to be interpreted as described in RFC-2119.

Miner Configuration#

Miner MUST accept the following configuration options:

  • miner.maxmergedbundles (int) - max number of MEV bundles to be included within a single block

Definitions#

Relay#

An external system delivering MEV bundles to the node. Relay provides protection against DoS attacks.

MEV bundle or bundle#

A list of transactions that MUST be executed together and in the same order as provided in the bundle, MUST be executed before any non-bundle transactions and only after other bundles that have a higher bundle adjusted gas price.

Transactions in the bundle MUST execute without failure (return status 1 on transaction receipts) unless their hashes are included in the revertingTxHashes list.

When representing a bundle in communication between the relay and the node we use an object with the following properties:

PropertyTypeDescription
txsArray<RLP(SignedTransaction)>A list of transactions in the bundle. Each transaction is signed and RLP-encoded.
blockNumberuint64The exact block number at which the bundle can be executed
minTimestampuint64Minimum block timestamp (inclusive) at which the bundle can be executed
maxTimestampuint64Maximum block timestamp (inclusive) at which the bundle can be executed
revertingTxHashesArray<bytes32>List of hashes of transactions that are allowed to return status 0 on transaction receipts

MEV block#

A block containing more than zero 'MEV bundles'.

Whenever we say that a block contains a bundle we mean that the block includes all transactions of that bundle in the same order as in the bundle.

Unit of work#

A transaction, a bundle or a block.

Subunit#

A discernible unit of work that is a part of a bigger unit of work. A transaction is a subunit of a bundle or a block. A bundle is a subunit of a block.

Total gas used#

The sum of gas units used by each transaction from the unit of work.

Average gas price#

For a transaction it is equivalent to the transaction minerFee := Min(feeCapPerGas - BASEFEE, priorityFeePerGas) - and for other units of work it is a sum of (average gas price * total gas used) of all subunits divided by the total gas used by the unit.

Direct coinbase payment#

The value of a transaction with a recipient set to be the same as the coinbase address.

Contract coinbase payment#

A payment from a smart contract to the coinbase address.

Coinbase payment#

A sum of all direct coinbase payments and contract coinbase payments within the unit of work.

Eligible coinbase payment#

A sum of all direct coinbase payments and contract coinbase payments within the unit of work.

Gas fee payment#

An average gas price * total gas used within the unit of work.

Eligible gas fee payment#

A gas fee payment excluding gas fee payments from transactions that can be spotted by the miner in the publicly visible transaction pool.

Bundle scoring profit#

A sum of all eligible coinbase payments and eligible gas payments of a bundle.

Profit#

A difference between the balance of the coinbase account at the end and at the beginning of the execution of a unit of work. We can measure a transaction profit, a bundle profit, and a block profit.

Balance of the coinbase account changes in the following way

Unit of workBalance Change
Transactionaverage gas price * total gas used + direct coinbase payment + contract coinbase payment
Bundleaverage gas price * total gas used + direct coinbase payment + contract coinbase payment
Blockblock reward + average gas price * total gas used + direct coinbase payment + contract coinbase payment

Adjusted gas price#

Unit of work profit divided by the total gas used by the unit of work.

Bundle adjusted gas price#

Bundle scoring profit divided by the total gas used by the bundle.

sv0.3=ฮ”coinbase+โˆ‘TโˆˆUgTmTโˆ’โˆ‘TโˆˆMโˆฉUgTmTโˆ‘TโˆˆUgTs_{v0.3} = \frac{\Delta_{coinbase} + \sum_{T\in U}g_Tm_T - \sum_{T\in M \cap U}g_Tm_T}{\sum_{T\in U}g_T}

ss: bundle UU score used to sort bundles.
UU: ordered list of transactions TT in a bundle.
MM: set of transactions TT in the mempool.
gTg_{T}: gas used by transaction TT.
cTc_{T}: fee cap per gas of transaction TT.
ฮดT\delta_T: priority fee per gas of transaction TT.
eTe_{T}: effective fee per gas of transaction TT equal minโก\min(cTc_{T}, BASEFEE + ฮดT\delta_T).
mTm_{T}: miner fee per gas of transaction TT equal eTe_{T} - BASEFEE.
ฮ”coinbase\Delta_{coinbase}: coinbase difference from direct payment.

Bundle construction#

A bundle SHOULD contain transactions with nonces that are following the current nonces of the signing addresses or other transactions preceding them in the same bundle.

A bundle MUST contain at least one transaction. There is no upper limit for the number of transactions in the bundle, however bundles that exceed the block gas limit will always be rejected.

A bundle MAY include eligible coinbase payments. Bundles that do not contain such payments may be discarded when their bundle adjusted gas price is compared with other bundles.

The maxTimestamp value MUST be greater or equal the minTimestamp value.

Accepting bundles from the network#

JSON RPC#

Node MUST provide a way of exposing a JSON RPC endpoint accepting eth_sendBundle calls (specified here). Such endpoint SHOULD only be accepting calls from the relay but there is no requirement to restrict it through the node source code as it can be done on the infrastructure level.

Bundle eligibility#

Any bundle that is correctly constructed MUST have a blockNumber field set which specifies in which block it can be included. If the node has already progressed to a later block number then such bundle MAY be removed from memory.

Each transaction in the bundle MUST have priorityFeePerGas equal or greater than block.BASEFEE + 1 GWei to be selected for the block.

Any bundle that is correctly constructed MAY have a minTimestamp and/or a maxTimestamp field set. Default values for both of these fields are 0 and the meaning of 0 is that any block timestamp value is accepted. When these values are not 0, then block.timestamp is compared with them. If the current block.timestamp is greater than the maxTimestamp then the bundle MUST NOT be included in the block and MAY be removed from memory. If the block.timestamp is less than minTimestamp then the bundle MUST NOT be included in the block and SHOULD NOT be removed from memory (it awaits future blocks).

Block construction#

MEV bundles MUST be sorted by their bundle adjusted gas price first and then one by one added to the block as long as there is any gas left in the block and the number of bundles added is less or equal the MaxMergedBundles parameter. The remaining block gas SHOULD be used for non-MEV transactions.

When constructing the block each next bundle added after the first bundle MUST generate at least 99% of the bundle adjusted gas price from the time of the sorting (the first bundle will naturally provide 100% of this value).

Block MUST contain between 0 and MaxMergedBundles bundles.

A block with bundles MUST place the bundles at the beginning of the block and MUST NOT insert any transactions between the bundles or bundle transactions.

When constructing the block the node should reject any bundle that has a reverting transaction unless its hash is included in the RevertingTxHashes list of the bundle object.

The node SHOULD be able to compare the block profit for each number of bundles between 0 and MaxMergedBundles and choose a block with the highest profit, e.g. if MaxMergedBundles is 3 then the node SHOULD build 4 different blocks - with the maximum of respectively 0, 1, 2, and 3 bundles and choose the one with the highest profit.

Bundle eviction#

Node SHOULD be able to limit the number of bundles kept in memory and apply an algorithm for selecting bundles to be evicted when too many eligible bundles have been received.

Rationale#

Naive bundle merging#

The bundle merging process is not necessarily picking the most profitable combination of bundles but only the best guess achievable without degrading latency. The first bundle included is always the bundle with the highest bundle adjusted gas price

Using bundle adjusted gas price instead of adjusted gas price#

The bundle adjusted gas price is used to prevent bundle creators from artificially increasing the adjusted gas price by adding unrelated high gas price transactions from the publicly visible transaction pool.

Each bundle needs a blockNumber#

This allows specifying bundles to be included in the future blocks (e.g. just after some smart contracts change their state). This cannot be used to ensure a specific parent block / hash.

Future Considerations#

Full block submission#

A proposal to allow MEV-Geth accepting fully constructed blocks as well as bundles is considered for inclusion in next versions.

Backwards Compatibility#

This change is not affecting consensus and is fully compatible with Ethereum specification.

Bundle formats are not backwards compatible and the v0.2 bundles would be rejected by v0.1 MEV clients.

Security Considerations#

The node should ensure that MEV bundles that are awaiting future blocks are evicted when at risk of reaching the storage limits (memory or persistent storage).