2021-07-10 18:58:04
Today, we introduce Part 1 of Cloque Finance - a physically-settled futures protocol for blockspace/hashpower.
Cloque provides fee/revenue stability for miners and an alternate, if not better, way to capture MEV.
https://www.notion.so/marlinlabs/Cloque-Design-v1-fb7cd0258ac24412ab7d18265f872816 (WIP)
Gas Price Auctions have long led to unpredictable gas prices for users and uncertainty in revenue for miners. Simultaneously, MEV has been on the rise since Phil Daian’s work on Flash Boys 2 with revenues exponentiating post DeFi summer.
Flashbots, a community-driven project has garnered attention for spearheading research in exposing, tackling and redistributing MEV.
However, Flashbots makes design choices which have their own pros and cons, proponents and opponents and is but one in a spectrum of solutions.
Few eg: It relies on private mempools, doesn’t provide revenue stability, can lead to overbidding & competition amongst traders and is restricted to payments via Coinbase.
Ultimately, to prevent miners themselves from frontrunning SGX or protocol-level changes are required.
Ed Felten, Ari Juels et al have written extensively against MEV auctions.
This isn't to say that Flashbots is a bad initiative. Rather, Flashbots is unlikely to be a one-size-fit-all solution. It’s very likely that more than one approach will coexist.
Cloque Futures might set the baseline with fixed capacity and Flashbots for flexible, burst cap.
So what’s Cloque: Cloque allows miners to sell physical blockspace futures denominated by the gas limit and position inside the block. Users can buy futures in advance and can request delivery by providing tx bundles.
Such a system provides a stable cost basis for traders, predictable revenue for miners & avoids overbidding. It allows payments to happen out of band so it doesn't put any restrictions on the bundles. Each bundle doesn't have to pay for itself and hence is more gas efficient.
We’re considering starting with an alpha deployment on Polygon and BSC with smaller and more manageable validator sets before transferring our learnings to Eth mainnet. There seems to be interest for similar products in other ecosystems as well.
https://forums.solana.com/t/bounty-eth1-flashbots-auction-on-solana/2113
There are a number of design choices that are up for discussion such as the use of a second price auction. We invite you to our dedicated discord channel at https://discord.gg/vVvVhUbcJu
Lastly, a number of projects provide interesting alternatives in the solution space Keeper DAO, Archer DAO, Gnosis, Chainlink Fair Sequencing Service.
As was mentioned in the beginning, there's a second Part to the protocol which will be shared in another thread.
Spread the word: https://twitter.com/MarlinProtocol/status/1413865117813444613
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