PIP-65: Economic Model for VEBloP Architecture

[Tane]

@jerry
First of all, thank you for putting up this proposal.
We understand this requires a lot of research and deep consideration, and we do appreciate that.

That said, we wanted to share some thoughts here.

@H_Rook

Included PIPs

• PIP-64: Validator-Elected Block Producer
• PIP-72: Witness-Based Stateless Verification

It seems that PIP-64, which is tightly connected to this PIP-65, is already included in the proposed Rio Hardfork, although there are still several ideas/concerns around these proposals waiting for responses.

Here are some of them from both PIP-64 & PIP-65 that we find worth discussing and that haven’t received responses yet (Apologies if you already replied to them somewhere else, or we simply missed it).

@Thogard

Enshrined PBS would be ideal if additional safeguards for users are added to consensus (e.g., priority fee sequencing) - and perhaps this proposal is a roundabout way of implementing exactly that - but it’s impossible to analyze it without the economic / mechanism design.

@dnzdlklc

• The exact composition of witnesses is not explicitly defined, can we get a breakdown of what these witnesses will contain?
• Different implementations could significantly vary in size and complexity
• Witness format standardisation would be required for interoperability

@Sinkas

Given that, validators will need to monitor for malicious block proposers and especially MEV. How will that be done in practice? Is there any tooling available for the validators to use, assuming that validators cannot run a full node?

@everstake_masha

Regarding the suggested fee-sharing model: while it’s good to see that non-block-producing validators wouldn’t be excluded entirely, the details around how their share is calculated are still unclear. Since all the parameters — like commission %, equal share %, and performance weights — would be adjustable by governance, it’s hard to predict how this would work in practice or how sustainable it would be for validators outside the block producer set.

We also share these concerns, especially @Sinkas 's comment on how the out-of-band payments and malicious MEV extraction can be detected so that social consensus mentioned below can work as intended.

@jerry

This is mitigated in the short-term by limiting block producers to be operated only by known trusted entities where there are off-chain agreements to operate in an agreed manner with respect to transaction ordering / MEV.

If we can’t detect them properly, it will affects the user experience to bad directions, and that would ruin the whole point of this upgrade.

With this, we do not mean we need a full consensus on the forum, as there is always a need for complex balancing of pros and cons, and sometimes there’s no central point where everyone agrees.
But, since this is very important upgrade that requires careful consideration, we appreciate it if you could respond to some of those comments.
That would give the community a great confidence to keep working with Polygon.