undefined | Better HN

0 pointschrisco2554y ago0 comments

Miners for Ethereum are incredibly profitable and benefit enormously from side-channel MEV (miner extractable value) payouts that tip them for transaction ordering. In doing so, they extract value from users making trades. In addition, a reduced issuance in crypto tends to lead to the underlying asset appreciating in value, as noted by the Bitcoin stock-to-flow model in the wake of each halvening.

The "code is law" is not some universal absolute. Blockchains have always been forkable. But a chain can't have a contentious fork without a cost and it becomes costlier and riskier to do later in a chain's life.

0 comments

BLKNSLVR4y ago

My understanding of MEV was "Maximum Extractable Value", and to clarify: MEV is the process by which a miner takes advantage of their ability to view pending transactions so they can "front-run" (add their own transactions ahead of) the transactions of others, bumping up the costs for the transactions that come after theirs, thus "extracting maximum value" from their privileged position.

Using the original article author's analogy, the "working class" are adding their own percentage to the retail price and taking those profits home.

chrisco255OP4y ago

MEV began as Miner Extractable Value, but a lot of people are adopting Maximum so that they can keep the same acronym for proof of stake.

They typically don't have the on-chain analysis or skill to reorder the transactions in the highest extractable way, so people bid for these opportunities through side channels they signal the miner to do (off-chain) based on the mempool (backlog) of transactions. Miners profit from this activity and in some cases these profits exceed the 2ETH per block issuance. The class analogy is strained and doesn't fit at all. These are only possible because Ethereum has a rich application layer (and if anyone is 'working class' it's the users, devs and dapps on the chain). But these profits more than made up for any offset in EIP1559 losses.

ButtSpark694y ago

Also, Ethereum Classic has been 51% attacked and then reversed transactions a few times. So not sure if author is recommending ppl avoid altcoins entirely?

j / k navigate · click thread line to collapse