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Orderflow

has a Solution

Stephane Gosselin (thegostep)

Architect, Steward, and Founder @ Flashbots

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MEV Supply Chain

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Orderflow Flywheel

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What is an orderflow system?

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The Orderflow System design problem

We know orderflow is valuable because of MEV

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An optimal orderflow system needs to:

> Measure the value of the orderflow

> Capture the value of the orderflow

> Attribute the value of the orderflow

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Whichever system is the best at these will be able to create the most value for users

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Insight #1

Optimal price discovery is determined by open markets

Exclusive orderflow cannot compete with open orderflow markets

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Insight #2

MEV == Gas Price

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MEV minimization == Gas Price minimization

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MEV is a fee estimation problem - if the user knows how much MEV their transaction is exposing, they can capture the value themselves

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Insight #3

Users have a Time/Price preference curve

Users are willing to compromise on price optimality to get reliable execution

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Insight #4

Gas prices can be negative

Users can capture MEV without complicated payments

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Solution: Bring back the Fee Escalator

New transaction type which allows users to start off with negative gas fees / MEV exposed and gradually expose more gas fees / MEV until profitable for block builder to include the transaction on chain. A dutch auction for transaction inclusion.

✔️Permissionless as allows sending the transaction through public txpool leading to best price and execution

✔️Provides universal MEV protection for users by being compatible with all tx types