Sriram
931 posts
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@bl8_runner there is no actual binding, some issuers have 3rd party audits or trusted custodians to show they have backing, but that's pretty much it.
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fcfs isn't anyway not possible on a distributed system since there is no way to accurately timestamp the user sending txn
better thing is to just optimize for censorship with FBO and you also ensure validator rev doesn't drop
crypto overall anyway is betting that the decentralization premium over long term will make them the default system for orderflow, so price discovery is a long term battle to be won.
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FBA in this lecture is not the FBA solana is building
FBA as referenced in this talk (and literature) is a discrete auction with a uniform clearing price
solana FBA is a discrete auction for ordering (call it FBO)
auctions for ordering are a completely untenable market structure for trading. if we just ported current solana market structure to FBA, we would replace the "latency arms race" with a more extractive auction
we can save the market structure of FBO by building FBA markets (in the traditional uniform clearing sense) and/or application-specific-sequencing (ACE) where makers on orderbooks wouldn't compete with takers and just compete with other makers over priority. or on a traditional AMM with ACE, priority would matter less
but FBAs and ACE don't require FBO
so what meaningful properties does FBA give users? censorship resistance and in future designs liveness guarantees
with multiple proposers some rule is needed order transactions (FBO) but to make that market efficient, protocols need to drive the value of order auctions to zero
toly 🇺🇸@toly
Frequent batch auctions.
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this program requires a payment on ethereum to submit a report
can't make this shit up
ye@tanmayy4l
@jump_firedancer i found a bug but i dont have 100$
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cool!
afaict priority fees spiking today is also just for inclusion, because aggregators are only doing price pro-rata, so oracle updates just want to land before simulation so they get into the fills
it exhibits today as having to pay tips and getting exorted for my inclusion
but just with MCP censorship stuff that will fall, and i think revenue will drop, and even aggregators will just do one quote per slot
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@sriramvas @toly > so makers will just bid once a slot and no revenue from toxic takers
I will let someone else respond I've been given bad grades in economics for suggesting this
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@alessandrod @toly me as an exchange why would i want my makers to burn priority fees to solana when there is no price discovery happening during the slot anyway?
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but who is going to pay for ordering?
if there is a batch, there is no concept of price-time queue
i believe exchanges will also just have a batch auction at same interval with a priority fee cap with ACE to protect makers
so makers will just bid once a slot and no revenue from toxic takers
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in a MCP world won't priority fees drop assumig same volumes as today?
currently both oracle updates and searchers pay higher fees mainly for inclusion. if there are multiple proposers that are competing to include me, the true priority fee value will be lower?
in that case the argument of "need high volume to justify FCFS" falls, both seem equivalent to me
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@toly why?
MCP FCFS <- CR
Prio fees <- granular FBA
I get my nuggies and you get rev
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@cavemanloverboy speed of light is the final frontier
we are going to IBRL so much
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we are not done on the software side until sigverify is the bottleneck
then, we are not done on the hardware side until thermals are the bottleneck
physics is always the final frontier
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one of you who helps me test something for 10 minutes and does ~10ms replay of mnb blocks
y'all are not ready for what's coming to agave
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the best trade in crypto right now isn't a token.
it's buying dollars for 92 cents on Polymarket.
introducing @freemoneylfg, it finds high-probability prediction market contracts about to resolve AND lets you earn the spread.
just math.
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@LoganJastremski FIFO at protocol level allows apps to build either of FIFO or FBA at program level tho. isn't that a better design?
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The high-frequency trading arms race is a symptom of flawed market design. Instead of the continuous limit order book market design that is currently predominant, we argue that financial exchanges should use frequent batch auctions: uniform price double auctions conducted, for example, every tenth of a second. That is, time should be treated as discrete instead of continuous, and orders should be processed in a batch auction instead of serially.
Our argument has three parts.
First, we use millisecond-level direct-feed data from exchanges to document a series of stylized facts about how the continuous market works at high-frequency time horizons: (i) correlations completely break down; which (ii) leads to obvious mechanical arbitrage opportunities; and (iii) competition has not affected the size or frequency of the arbitrage opportunities, it has only raised the bar for how fast one has to be to capture them. Second, we introduce a simple theory model which is motivated by and helps explain the empirical facts.
The key insight is that obvious mechanical arbitrage opportunities, like those observed in the data, are built into the market design—continuous-time serial-processing implies that even symmetrically observed public information creates arbitrage rents. These rents harm liquidity provision and induce a never-ending socially wasteful arms race for speed.
Last, we show that frequent batch auctions directly address the flaws of the continuous limit order book. Discrete time reduces the value of tiny speed advantages, and the auction transforms competition on speed into competition on price. Consequently, frequent batch auctions eliminate the mechanical arbitrage rents, enhance liquidity for investors, and stop the high-frequency trading arms race.
CANTELOPEPEEL@CantelopePeel
MCP probably won't have the intended effect because it just turns a simple block producer monopoly into a block producer monopoly with more timing games, massive complexity and higher latency. If the game is rigged already, you must ask: why obfuscate further and not fix it.
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@bw_solana @jacobvcreech @TimGarcia0 possible to reduce leader slots to 2?
can be great gains before MCP
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narrator: he pissed people off
but it's fine because all complaints went to @jacobvcreech and @TimGarcia0
Brennan Watt@bw_solana
this opinion might piss some people off... we should 1. cut slot times in half before Alpenglow turns on 2. keep vote cost the same (double the cost to valis)
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The foundation should remove the native validator scheduler
It competes with the hardworking ecosystem teams of jito and harmonic
With a default solution, they're kingmaking their own product
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@vibhu but there is a tangible cost to IBRL, overtime if hardware improvements don't scale fast enough, it might lead to validator centraliztion
there is also risk of geographic centralization if enough price discovery moves over.
x.com/i/status/20330…
Sriram@sriramvas
@DrNickA solana assumes that if everyone adopt it, it will automatically be net-neutral. hence push to IBRL and cheapest chain ethereum thinks at scale chains will undergo nation-scale attacks and hence needs to built more defensively
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We have two excellent chains at the frontier. At the moment it’s a two horse race between Solana and Ethereum. It is very good that these have radically divergent trajectories.
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@therealchaseeb perps are still very grey regulation-wise, will possibly see some pushback this year esp on commodities and equities
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If we don't compete on perps, we don't become the global financial layer.
Spot can't bring the world's financial markets on-chain. It requires custody of the underlying asset. A custodian for gold, a legal wrapper for equities, tokenization infrastructure for everything else. Slow and expensive. Perps skip all of it. Synthetic contract, any asset, no custody, no settlement, trade from anywhere.
If Solana gets this right, every market on earth lives on one ledger. That's the prize.
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i blame ethereum for inventing slippage and twitter for inventing quotes.
Cloakd ⌛@CloakdDev
The PropAMM complaints are funny as its just down to a historical issue with how solana traders have used the chain for 4+ years * Solana was soo broken 2 years ago high slippage was the only way to get into trades * 20% slippage became the "norm" for trading terminals & bots * Jito sandwich bots started causing havoc * Jito blamed everyone but themselves - Dynamic slippage invented * Solana fixed TX delivery * Behaviour stayed the same
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