The staking economy is a thriving industry, offering over $12 billion in rewards, with $600 million attributed to Maximal Extractable Value (MEV). At Chorus One, we deeply recognize the significance of MEV for both validators and investors, which has fueled our commitment to continuously optimize our infrastructure to ideally integrate with the Ethereum MEV pipeline.
MEV serves as a gateway for validators to maximize the value extracted from transactions within a block. As early as 2019, the research paper "Flash Boys 2.0," authored by Ari Juels and Lorenz Breidenbach, shed light on its real-world impact, particularly in decentralized exchanges and user experiences. The cumulative value of MEV extracted on Ethereum alone surpassed $78 million in early 2021 and has skyrocketed to an astonishing $600 million in 2023.
MEV has become a cornerstone of Chorus One's research efforts. As one of the earliest and most influential contributors to MEV research, we conduct in-house studies and experiments to optimize MEV yield. Notably, we were commissioned by dYdX to produce an in-depth report on MEV within dYdX v4, and released the first public tracker of (pre-protorev) MEV on Osmosis (@chorusonemev). Furthermore, we have developed a customized version of the Solana client to capture MEV opportunities on the Solana network.
To achieve the highest possible MEV yield, employing effective infrastructure strategies is paramount. At Chorus One, we conduct a series of experiments to identify the most efficient combination of strategies, aiming to optimize our MEV performance. Below, we delve into the fundamentals of MEV extraction, exploring the solutions we implement to improve our performance.
In general, MEV empowers block producers to rearrange, include, or exclude transactions, providing advantages that can impact users. However, there is a subtle distinction in how MEV operates on Ethereum compared to other blockchain networks.
On Ethereum, the process involves a 'block builder' constructing the block, which is then passed on to a 'relay' before being proposed by a validator. This Proposer-Builder Separation (PBS) introduces a separation between the block producer and the proposer. As an Ethereum validator, Chorus One focuses on optimizing MEV rewards by fine-tuning our interaction with relays.
Conversely, on most other chains, validators themselves build the block and have the freedom to prioritize transaction sorting to maximize MEV rewards.
We continuously optimize our infrastructure to capture the highest possible MEV rewards.
The following graph illustrates our performance over a 60-day period. Over this time period, Chorus One nodes have captured close to 14% more MEV rewards per validator (ETH) when compared to the weighted industry average, observed on Lido.
*Please note that this is a snapshot, and that MEV rewards fluctuate as a function of variance and market conditions. Please visit Rated Network to view the latest figures.
This process of continuous infrastructure optimization highlights the significance of employing a combination of well-established best practices to achieve higher MEV rewards. By utilizing specific methods in tandem, validators can effectively maximize their MEV yield. More on this below.
Before diving into Chorus One's approach, we briefly explore the process of extracting MEV. It involves key players with distinct roles:
Block Producers: They create blocks of transactions on the blockchain, deciding which transactions to include and their order.
Relays: A relayer is an entity responsible for checking blocks before passing them to the block producers. The relay confirms the builder blocks for validity and estimate the MEV-related value of each block. By tweaking how block producers/validators interface with relays, they can add value by optimizing MEV rewards.
Searchers: These individuals or automated bots constantly monitor the blockchain, searching for profitable opportunities to manipulate transaction order and earn additional profits through MEV.
DApps and Protocol Developers: Decentralized applications (DApps) and the developers who create rules for block producers support MEV extraction. DApps create opportunities for MEV extraction through their design, while protocol developers establish rules that enable block producers to capture MEV.
In simpler terms, block producers create blocks,relays check the blocks, searchers seek ways to profit by manipulating transaction order, and DApps and protocol developers provide the framework and incentives for MEV extraction.
Validators often employ similar solutions to increase rewards and actively seek optimization opportunities. For instance, MEV-Boost, an implementation of proposer-builder separation (PBS) developed by Flashbots for Ethereum, enables validators to maximize staking rewards by selling block space to builders in an open market.
MEV-Boost is free, open-source, and neutral software designed to democratize MEV while minimizing associated negative implications, such as consensus-layer security risks, centralization, or the risk of searchers going rogue. For more information on MEV-Boost software, visit https://boost.flashbots.net.
MEV plays a significant role in yield generation on networks like Ethereum, and as a result, our nodes are MEV-boost enabled by default.
With a team of in-house experts, we continuously adjust our infrastructure to optimally integrate with the Ethereum MEV pipeline.
1. Relay Selection
Relays are crucial intermediaries in the MEV extraction process, acting as trusted connectors between block builders and validators. Their primary role is to facilitate seamless data exchange and ensure the selection of the most lucrative bids for validators. We continuously conduct experiments to identify the optimal combination of relays (as shown in the relay market dashboard below) , aiming to establish efficient communication and achieve the highest valid bid submission to validators.
Our approach: By carefully selecting the best relays, we enable our validators to receive winning bids from all connected relays.
2. Latency Games
Exploring the dynamics between builders, relays, and validators is even more interesting with a new dimension: time.
Latency, the delay in data transmission, has gained significant importance for relays and the entire MEV supply chain, leading to notable consequences. It acts as a centralizing force within the MEV supply chain, with relays having shorter latency likely to be more successful in auctions. This preference encourages builders to prioritize sending their blocks to those relays.
Our approach: We optimize our connection to relays when requesting blocks by prioritizing payoff and minimizing the probability of a missed slot.
3. Infrastructure Optimization
On the infrastructure and hardware front, we prioritize optimizing the performance of our validators. Through the strategic selection of hardware, geographical distribution, and client implementation, we ensure that our infrastructure operates at its peak efficiency. This optimization enhances the rewards generated for our customers.
Our approach: We are actively investing in and expanding our infrastructure to further elevate performance and rewards.
TL;DR: More rewards, more revenue.
Through our unique solutions and ongoing research, we continuously push the boundaries to enhance the rewards obtained through MEV. Today, our MEV-boost enabled nodes capture significantly higher APR on staked ETH, surpassing the yield of the average validator.
To learn more about our approach to MEV, visit: https://chorus.one/mev-maximum-extractable-value
To stake with Chorus One, reach out to staking@chorus.one and we'll get back to you.
About Chorus One
Chorus One is one of the biggest institutional staking providers globally operating infrastructure for 45+ Proof-of-Stake networks including Ethereum, Cosmos, Solana, Avalanche, and Near amongst others. Since 2018, we have been at the forefront of the PoS industry and now offer easy enterprise-grade staking solutions, industry-leading research, and also invest in some of the most cutting-edge protocols through Chorus Ventures.
Amidst the dynamic blockchain landscape, Archway Network stands out as a platform that has captured the attention of developers and enthusiasts alike. This blog delves into the unique features and opportunities that Archway offers, shedding light on its architecture, tokenomics, use cases, developer rewards, and recent activities that ascribe it as a prominent player in the ecosystem.
Archway’s Architecture: Where Innovation Thrives
Archway Network is a testament to visionary architecture. By leveraging the Cosmos SDK, Tendermint, and CosmWasm, the Archway team have built an infrastructure that excels in speed, scalability, and security. What truly sets Archway apart is its seamless interoperability through the Inter-Blockchain Communication (IBC) protocol, which fosters a cohesive ecosystem where data and value can flow freely between different blockchains.
Unlike L1 blockchains that primarily focus on token distribution to early participants, Archway takes a different approach. It recognizes the value and impact of developers and builders by incentivizing them based on their contributions to the network. This unique model aims to level the playing field among developers, providing equal access to capital and support, regardless of their connections or associations.
Tokenomics: Incentivizing Developer Contributions
Archway introduces a novel approach to developer rewards by exploring revenue distribution alternatives. Beyond gas fees, developers building on the network are incentivized through a meticulously designed combination of gas rebates, inflation, and premiums. This multifaceted reward system ensures that developers are recognized and rewarded for their invaluable contributions to the network.
Gas fees are not just divided up among validators and dApps, but split evenly between them, ensuring a fair distribution of rewards. But Archway doesn't stop there—it pushes the boundaries further. With the inflation rate at 10% and expected APR ranging around ±21% at launch, developers have a stake in shaping the network's future.
A quarter of the inflation is allocated to the dApps rewards pool, a vibrant ecosystem where developers are rewarded based on the gas generated by their applications within a given epoch. Additionally, developers have the freedom to set custom fees for interactions with their smart contracts, enabling them to earn 100% of the charges and fostering a direct stake in their application's success. By seamlessly embedding these fees within the network fee, Archway Network delivers a user-friendly experience, sparing users from the complexity of multiple fees.
Use Cases
Archway Network opens up a wide range of possibilities for developers and entrepreneurs. By rerouting their rewards to a shared pool, developers can subsidize gas fees for users, creating a more familiar and accessible experience akin to traditional web applications. This user-centric approach revolutionizes the way people interact with blockchain-powered applications, removing the burden of high transaction costs and propelling mainstream adoption.
Moreover, Archway Network empowers developers to swiftly launch their dApps without the need to bootstrap a standalone chain. For early-stage projects struggling to secure funding or establish a secure blockchain, Archway provides a springboard for testing product-market fit and scaling ambitions. Developers can prototype and iterate on Archway before transitioning to their own appchain or rollup, amplifying their chances of success.
Archway isn't solely focused on providing a versatile blockchain infrastructure—it also fosters a vibrant and supportive developer community. By offering a plethora of hackathons, workshops, grants, bug bounties, and developer-focused initiatives, Archway stimulates a culture of innovation and collaboration. Developers are incentivized to create new modules, tooling, and applications that enrich the ecosystem and unlock new possibilities.
Check out some of Archway’s key initiatives here:
Hackathons: https://blog.archway.io/tagged/hackathons
Workshops: Archway Workshops
Grants: https://blog.archway.io/accelerating-value-capture-the-archway-foundation-grants-program-40f3edbdf9
Governance
Archway Network implements a governance model that allows participants and token holders to actively shape the protocol's future. Through proposals and on-chain voting, Archway's decentralized community can influence the direction of the platform. Governance is facilitated by their native token, $ARCH, which ensures fair and transparent participation. Holders of the token can propose changes and vote on active proposals, with consensus being reached through a defined threshold. Engaging with the Archway community involves actively participating in governance by submitting proposals or casting votes on existing ones.
Recent Developments
In its relentless pursuit of excellence, Archway Network has achieved several milestones that highlight its potential as a catalyst for change. Notably, the launch of its incentivized testnet, the successful completion of multiple security audits, and the adoption of WebAssembly (Wasm) have garnered attention from developers and blockchain enthusiasts alike. Now with the mainnet launch, Archway is poised to reshape the blockchain landscape, offering an unprecedented level of developer empowerment and accessibility.
Deep Dive into Archway network: https://www.youtube.com/watch?v=TCoTNlzohIo
Useful resources:
Website: https://archway.io
Twitter: https://twitter.com/archwayHQ
Medium: https://medium.com/@archwayHQ
Github: https://github.com/archway-network
Docs: https://docs.archway.io
Discord: https://discord.com/invite/5FVvx3WGfa
Reddit: https://www.reddit.com/r/Archway/
Telegram: https://t.me/archway_hq
Staking $ARCH with Chorus One
Inflation rate: 10%
Staking APR: expected ±21% at launch (with 35% ARCH staked)
To start staking with Chorus One, reach out to staking@chorus.one.
About Chorus One
Chorus One is one of the biggest institutional staking providers globally operating infrastructure for 40+ Proof-of-Stake networks including Ethereum, Cosmos, Solana, Avalanche, and Near amongst others. Since 2018, we have been at the forefront of the PoS industry and now offer easy enterprise-grade staking solutions, industry-leading research, and also invest in some of the most cutting-edge protocols through Chorus Ventures.
After a record breaking event in Paris last year, EthCC, the premier European Ethereum conference returns on Monday 17 July for its sixth installation.
Chorus One is thrilled to be part of this dynamic gathering, where crypto enthusiasts from around the world convene. As we gear up to immerse ourselves in the event and share the latest developments in staking, we want to provide you with a closer look at our agenda, activities, and where to find us.
Over four days, EthCC will attract more than 4,000 industry leaders from the realms of finance and digital assets to explore the evolution of crypto and community. Through engaging fireside chats, thought-provoking panels, and invaluable networking opportunities, the conference will cover a wide range of crypto verticals, spanning from blockchain economics to rollups and gaming.
Our Chief Executive Officer, Brian Fabian Crain will take on the illustrious Versailles stage to lead a workshop delving into the significance of the Urbit ecosystem. Mark your calendar here.
Additionally, we invite you to join us for the sessions by our Research Analyst and Ethereum Expert, Gabriella Sofia and our Engineering Team Lead, Jennifer Parak. Gabriella will provide an analytical exploration, predicting the trillion-dollar potential of Ethereum staking. Catch her presentation at Saint Victor at 2:35 pm CEST on July 18.
Jennifer, on the other hand, will unveil her optimized Ethereum validator key-gen tool, "Eth-staking-smith," designed to streamline validator key management at scale. Be sure to attend her talk at Saint Victor at 2:10 pm on July 20.
In addition to Brian, Gabriella, and Jennifer, other Chorus One attendees you can expect to meet at the event, include:
Vic Kaul, Xavier Meegan, Michael Moser, Yannick Socolov, Luis Nuñez Clavijo, Albert Poetzsch, Anita Zaman, Neal Roche, Alexis Tabak
To schedule a meeting, reach out to us at: staking@chorus.one
See you there!
About Chorus One
Chorus One is one of the biggest institutional staking providers globally operating infrastructure for 40+ Proof-of-Stake networks including Ethereum, Cosmos, Solana, Avalanche, and Near amongst others. Since 2018, we have been at the forefront of the PoS industry and now offer easy enterprise-grade staking solutions, industry-leading research, and also invest in some of the most cutting-edge protocols through Chorus Ventures.
Archway Network is a novel blockchain platform that has garnered attention from developers and enthusiasts. Powered by Cosmos SDK, Tendermint, and CosmWasm, Archway boasts a robust architecture emphasizing speed, scalability, and security. Its standout feature is seamless interoperability through the Inter-Blockchain Communication (IBC) protocol, enabling smooth data and value exchange between different blockchains. With its innovative features and developer-centric focus, Archway Network emerges as a prominent player in the blockchain landscape.
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About Chorus One
Chorus One is one of the biggest institutional staking providers globally operating infrastructure for 40+ Proof-of-Stake networks including Ethereum, Cosmos, Solana, Avalanche, and Near amongst others. Since 2018, we have been at the forefront of the PoS industry and now offer easy enterprise-grade staking solutions, industry-leading research, and also invest in some of the most cutting-edge protocols through Chorus Ventures.
