125 - Ethereum's Hidden Power Structures | Matt Cutler

41 snips

Jun 27, 2022

In this discussion, Matt Cutler, Co-founder and CEO of Blocknative, reveals his expertise on Ethereum’s evolving power structures as it transitions to proof-of-stake. He explains the roles of block builders and how they will change post-merge. Matt dives into Miner Extractable Value (MEV) and its implications for decentralization, discussing how users might be compensated. He emphasizes the importance of modular design and collective responsibility in shaping a more equitable transaction landscape for Ethereum's future.

Ask episode

AI Snips

Chapters

Transcript

Episode notes

INSIGHT

The Block Builder's Power

A hidden actor in Ethereum is the block builder, currently synonymous with mining pools.
This entity has significant power due to its control over transaction sequencing.

ANECDOTE

David Hoffman's Mining Experience

David Hoffman joined Ethereum by GPU mining and contributing hash power to a pool.
This inadvertently delegated block construction power, impacting potential MEV returns.

INSIGHT

The Importance of Decentralizing MEV

Unchecked MEV control by a few entities risks corruption and unfairness.
Decentralizing this power is crucial for a balanced ecosystem.

Get the Snipd Podcast app to discover more snips from this episode

Get the app

Matt Cutler is the Co-Founder and CEO of Blocknative and a gigabrain when it comes to Ethereum’s hidden power structures and all things blockchains.

As Ethereum approaches the merge, these power structures are going to change. What will this post-merge future look like? Will users get paid to use Ethereum?

Matt explains everything from first principles and it helps illustrate the complexities of everything discussed in this insightful episode. By the end of it, you’ll have a better understanding of the purpose of blockbuilders, the new post-merge roles, all things MEV, and so much more.

------ 📣 NOTIONAL | Real DeFi Yield https://bankless.cc/Notional

------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/

------ BANKLESS SPONSOR TOOLS:

⚖️ ARBITRUM | SCALED ETHEREUM https://bankless.cc/Arbitrum

❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across

🏦 ROCKET POOL | STAKE YOUR ETH https://bankless.cc/RocketPool

👻 AAVE V3 | LEND & BORROW CRYPTO https://bankless.cc/aave

⚡️ LIDO | LIQUID ETH STAKING https://bankless.cc/lido

🔐 LEDGER | NANO S PLUS WALLET https://bankless.cc/Ledger

------ Topics Covered:

0:00 Intro 6:27 The Reason for the Merge 10:07 The Values PoS Preserves 13:45 Blockbuilding Explained 16:35 Mining Pools & Incentive Categories 30:25 Why Decentralizing Power Matters 33:40 The Future State of Ethereum 39:21 The Post-Merge World Roles Explained 45:25 MEV Searchers vs. Blockbuilders vs. Stakers/Validators 55:45 PBS & MEV Boost & Who Are the Blockbuilders 1:03:50 Economic Rewards for Blockbuilders 1:17:19 Ethereum Will Eventually Pay Users? 1:19:40 Can Ethereum Stay Decentralized? 1:26:22 ETH The Asset 1:31:39 Where MEV Exists 1:35:16 How Blocknative Fits into All of This 1:37:30 Closing & Disclaimers

------ Resources:

Matt Cutler https://twitter.com/mcutler

Blocknative https://twitter.com/blocknative

End Game with Vitalik https://youtu.be/b1m_PTVxD-s

Ultra Scalable Ethereum https://newsletter.banklesshq.com/p/ultra-scalable-ethereum

The Guide to the Ethereum Roadmap with Jon https://youtu.be/xuLyZaty9iI

----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research.

Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures