From a strictly market-based perspective, a Truth Social read priority fee will likely lead to worse outcomes for users:
1. HFTs that pay the fee still act as both LPs and snipers, so LPs face the same risk of getting sniped as before, and users pay the same latency arbitrage tax.
2. Truth Social pockets 100% of the MEV. The fee would only improve user outcomes if the MEV were redistributed to (A) taxpayers or (B) LPs as compensation for getting sniped For (B), redistribution could only be done by the exchange, not by Truth Social, so the exchange's market design is what would result in a better outcome for users, not the fee.
3. The fee raises the barrier to entry for HFTs in their role as LPs in the HFT arms race, which reduces competition. Donald MacKenzie has a good essay on competition in HFT: sps.ed.ac.uk/sites/default/f…
4. The fee incentivizes POTUS to manufacture chaos to sell priority. Markets hate chaos.
What we specifically need in crypto is more MEV internalization and redistribution. Free markets are a means to that end but are not themselves the end.
We need more unapologetically free market people in crypto. Ironically the subscription nets to a better outcome for users.
If the information has value, then someone is already exploiting that edge. Assume it’s only citadel right now. They have some bots collocated next to the truth Aws servers to scrape this data faster than anyone else and they profit from that edge. The profit results in worse prices to consumers because all the alpha from the edge is captured in the dark forest.
If there is now some publicly available market for this edge, then any business can buy it and pass on the value of the edge to their users. So the maximum value the dark forest can extract is capped to the value of the subscription.
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I built this by hand at @LAUNCH Hackathon SF 2016, before vibecoding was a thing. Stayed up 36 hours straight, placed in the top 5 out of 250 teams, and won $5,000 cash. Led to my first job as a programmer and an interest in secret sharing. Great weekend.
Vibecoded a silly little tool that transfers files from your computer to your phone air-gapped using your camera at ~50 Kbps.
Nice to have when you're offline or on a plane, or need to send something super duper securely.
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It's good for protocols to internalize value that would otherwise be leaked out-of-band to privileged third parties. But it's also deeply unserious for an exchange to auction off the right to trade ahead of order flow without returning any of that value back to the traders who created that value in the first place.
The argument is that read priority auctions facilitate JIT liquidity more than front-running, but that's not borne by the data.
We already know from 20 months of Uniswap v3 data that sandwich attacks outnumber JIT liquidity attacks by 5.7x and have a 232x higher average ROI for attackers due to requiring less capital. Sandwich attacks also harm traders more than JIT liquidity benefits them (-5.93% vs. +0.139% slippage). Source: eprint.iacr.org/2023/973.pdf
Read priority fees are the most exclusive product on Hyperliquid: 2 slots exist, 3 wallets pay for them, but they burned 17,030 HYPE ($1.10M) in 30 days, a $13.4M annualized run rate.
Mechanically: 2 independent dutch auctions on a 3-minute cycle, each opening at 10x the prior clear and decaying to a 0.1 HYPE floor. The winning bid registers an IP onchain, and every node orders its gossip stream by slot - winners receive pending transactions pre-execution, ~25ms ahead per slot.
Looking at Hyperliquids history of narrow implementation and increasing breadth, it is likely these latency improvements will be expanded with more slots, materially adding to revenue in the future.
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This is the best visualization of toxicity in financial markets I have ever seen and contains all the data one would need to design an exchange from first principles.
1/ Four key moments from the ARG-ESP World Cup finals, starting with Spain's goal at the 106' mark:
Argentina-win book (crashed from 40% --> 12%)
- 25k shares resting within 5c when the ball crossed the line
- First cancel occurred 70ms before the ball crossed, removing liquidity at the point of foot contact
- 80% of all cancels landed within 262ms of each other, 95% of size removed from the book before takers landed
Spain-win book (ran from 60% --> 88%)
- 15k shares resting within 5c when the ball crossed the line
- Only 15% of cancels landed in time
- A 10k limit order from one maker failed to remove in time and was executed at 60.3c, accounting for the majority of the Spain-book losses associated with the goal
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MEV is neither good nor bad. It's a measure of value that can be extracted. And value that can be extracted can also be harnessed and redistributed to improve user outcomes. Just as energy is a measure of capacity to do work. It's whether that capacity gets harnessed to improve user outcomes that is good or bad. If a protocol leaks that capacity and fails to harness it, it's the protocol that's bad, not the MEV.
Please explain why MEV is good, what’s ONE good point about getting inexplicably bamboozled while doing a transaction?
It’s like moving to London, getting your phone snatched, and then everyone celebrating the snatcher for being a chad.
I thought this was a SAFE SPACE man.
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The highest-impact initiative for @ethlabs_org (or any other non-profit steward of Ethereum) would be to create and champion a new stablecoin whose USD backing earns yield to fund long-term R&D and buy ETH.
It would be in everyone's interest to rally around it and help Ethereum capture the billions of dollars in annual value currently leaking to for-profit issuers.
Announcing Ethlabs: a non-profit R&D lab for Ethereum and ETH
Our mission is to make Ethereum the settlement layer of the global economy.
The internet became global because shared protocols created a common language between networks. Private systems remained useful, but bounded. Finance is approaching a similar moment. As value, assets, and markets become digital, the world needs shared settlement infrastructure.
Ethereum is uniquely positioned to become that shared base layer, the neutral foundation on which users, institutions, and agents can transact without intermediation.
What we believe:
• We believe credible neutrality matters. Ten years of uptime and the lowest counterparty risk. Ground that cannot be pulled away by any one country, institution, company, or person.
• We believe ETH matters. The most valuable, programmable store of value. A decade of broad distribution, deep liquidity in onchain markets, and maximally trustless asset on Ethereum.
• We believe DeFi matters. Markets, liquidity, credit, exchange, and coordination, open to anyone.
• We believe adoption matters. Principles do not change the world until people benefit from them.
We sit between two worlds: real usage from the builders at the frontier, and the protocol that has to support it. We work with users, applications, wallets, L2s, infrastructure teams, institutions, ETH holders, core devs and researchers, then turn what they actually need into protocol work, shared standards, infrastructure, and shipped products.
Ethlabs is independent but Ethereum is a shared project. We are one node in a much larger network of stewards. This is the multi-node future.
We have spent the better part of the past decade contributing to Ethereum core research and development.
We are opinionated and transparent. We move with urgency, learn in public, and course-correct when we’re wrong.
We are building a lean, talent-dense team for people who want to do the most important work of their careers: join@ethlabs.org
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David Perkins retweeted
Actually, I'm comparing a network that's planning to process 11B transactions over 7 days with 10ms execution latency on public mainnet beginning tomorrow [1] with what the entire Solana ecosystem considers "the endgame for Solana block production." [2]
In that endgame, execution latency is 400ms. And that is often the case even today due to validators late-packing blocks instead of continuously propagating them. [3]
You're welcome to live in the present, but our team is skating to where the puck is going, which is why we're building on @megaeth.
[1] x.com/megaeth/status/2013261…
[2] x.com/solana/status/19994641…
[3] x.com/DrNickA/status/2008628…
It’s a bit of an existential moment for Solana IMO.
Thanks to some new analytical techniques, we can now actually see block packing behavior across the network (see IBRL.wtf).
The top chart in the QT shows validators choosing to maximize extractive value at the expense of network health by delaying all state transitions to the last possible tick in a block i.e. late packing.
This kills one of Solana’s killer affordances, transaction streaming. When used as designed, the network propagates shreds via Turbine continuously as the block is being built. That allows validators across the network to replay state in real time, vote early, and keep execution latency tight and predictable.
Late packing breaks that model. Instead of a stream, you get a burst. State only becomes visible at the end of the slot, collapsing temporal guarantees.
That matters because transaction streaming is what opens the door to hyperliquid style on-chain CLOBs with intrablock cancellations, deterministic execution, and an entire class of network economic primitives that depend on time actually meaning something on-chain.
Without streaming, you can’t reason about cancels. You can’t guarantee fairness. And you can’t safely build real-time markets, no matter how good the application logic is.
This is a real “can we have nice things?” moment for the network.
I’m actually confident that stakers will move their SOL toward validators that preserve what’s best for Solana long term. Stakers are implicitly long term holders, and a chain that has fast, deterministic trading is one of the strongest value proposition in crypto (trillions).
But getting there requires coordination. Either validators align on preserving streaming behavior, or stakers enforce it through delegation. One way or another, there’s a collaboration moment ahead if Solana wants to reach its ideal execution state. Or, we get stuck here.
If you direct stake your SOL choose a validator with a good IBRL score, or stake with @jito which optimises for IBRL validators and incentivises the best possible non-zero sum network behaviour.
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David Perkins retweeted
Low latency empirically does not have any effect on spreads and depth.
The market makers who need to reprice aren't the only ones who get faster; the snipers who pick them off get faster too. That means market makers have a constant (N-1)/N probability of getting sniped regardless of latency, so there is no incentive for them to quote tighter or deeper due to low latency alone. I.e., efficiency does not improve in *volume space.*
The effect that colo and low latency do have is on how quickly markets incorporate new information. I.e., efficiency improves in *time space.*
MegaETH alone does magically improve efficiency in time space, but not in volume space. The latter requires fresh ideas. 🙂
x.com/davidtperk/status/1981…
Smart and very cool to see MegaETH monetizing colo like TradFi exchanges. But important correction: colo and speed empirically have no effect on spreads and depth because makers aren’t the only ones getting faster; snipers get faster too. So this won’t lead to tighter spreads and deeper markets; i.e. efficiency in *volume space.*
Rather, the actual effect of colo and speed is how quickly the markets incorporate new information; i.e. efficiency in *time space,* but not volume space.
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If your contract on @megaeth isn't packmaxxing structs to keep blocks under their state growth limit for the rest of us, I will find you, season you with a dash of SALT, and feed you to the nearest pack of beefy bunnies.
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Rollup users can't choose where to post their data.
If one user chose to post their data to an alt-DA, everyone would have to trust the alt-DA to make that user's data available in order to verify the rollup's state.
That would turn the rollup into a validium or optimium.
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People often confuse privacy and anonymity, which leads to poor assumptions about market integrity.
Privacy hides what you're doing.
Anonymity hides who you are.
An exchange can offer anonymity but still disseminate your order to the world before it's executed.
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Asymmetric delays seem less useful onchain than offchain because they can only be as long as the time until the next block
If the block time is 100 ms, and there's a jump 10 ms before the next block, makers only have 10 ms to get a cancel into the next block before they can get sniped by someone faster
Only seems compatible with FCFS and a trusted sequencer to keep a queue offchain
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It's a curious look for a VC in crypto — where attribution is foundational — to plagiarize a 2009 forum post by Satoshi, block the person who noticed, and offer no apology.
Please do not copy + paste excerpts from Satoshi's forum posts without attribution.
satoshi.nakamotoinstitute.or…
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We're increasing economic freedom in the world by locking your account.
The future of money is here, and we need your driver's license to verify this withdrawal request.
We're updating the system by giving your home address to overseas support agents, putting your family's physical safety at even greater risk than before.
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I've always wanted to build something great. It's why I became a programmer.
When @renprotocol was abandoned and left for dead, and the community refused to let it die, we had to figure out what to do for v2. We had to decide whether to make incremental tweaks to an unsustainable v1, or risk it all to build something new — without knowing what it would even be but hoping we'd come up with something.
We decided to go for something new. It felt like jumping off a cliff and trying to build a plane on the way down, because we'd inherited the remnants of a bankruptcy and broken community without a product.
Quietly and relentlessly, all day, every day, we did the work. When we weren't heard from in public, we were researching, tinkering, experimenting, and getting feedback from other projects. After enough time, we came up with something that we became obsessed with. It's great, it's uniquely Ren, and it's our baby.
I can't think of anything more fulfilling than to build something of your own with a great team, share it with an open community of people and users from all around the world, and help grow it into an essential piece of the global financial infrastructure.
That's what motivates me.
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A protocol fee with a frontend exemption might lead to better liquidity, because if bots had to pay a higher taker fee at the protocol level, they’d be less likely to snipe stale quotes. LPs could respond by tightening spreads and adding depth for investors that use the canonical frontend
Shower thought: right now, frontends like Uniswap and Phantom charge fees, but the underlying protocols are free. What if this was reversed?
Say the underlying protocol charged a fee, but it was free to use an enshrined frontend? Liquidity would still open, trustless, and indexable, but routers or aggregators would effectively pay for integration at the protocol layer.
This strategy sould ensure that your canonical frontend owns the users and they aren't absorbed a layer up the stack, instead of the current model where users are incentivized to go elsewhere (1inch, Raydium) to avoid the fees. You'd presumably verify this on-chain by checking a signature from the canonical backend.
You could even introduce a dead man switch: if the canonical frontend hasn't signed in two weeks, we assume the frontend has died and the fee is cancelled for everyone, effectively opening the protocol completely.
Thoughts?
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No sequencer, validator, miner, relayer, prover, solver, or signer should be legally discriminated against based on speed alone.
If the fastest protocols in the transaction supply chain can't be expected to grind to a halt to screen for every transaction, then the slowest protocols shouldn't be expected to either (though operators should be able to opt in if they wish).
Screen on the hosted frontends and CeFi offramps, and allow market efficiency and incentives to flourish at the protocol layer.
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If your last name is Bech and you're wearing an orange jersey, your number has to be 32. It just has to be.
TCU receiver Jack Bech was selected MVP of the Senior Bowl on Saturday, catching the winning touchdown pass a month after his brother died in the deadly pickup truck attack in New Orleans.
espn.com/college-football/st…
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David Perkins retweeted
Sidechain bridges can’t be secured by the sidechain itself if the sidechain’s light client protocol doesn’t slash for equivocation, as is the case for Ethereum, I believe Polygon PoS, and others.
In this case, stake is actually meaningless because validators can equivocate to drain the bridge without getting slashed. It would *always* make economic sense for them to try to do so, regardless of stake : TVL. And bridge aside, it would destabilize the chain’s own consensus.
You thus need a third-party network that *can* be slashed, but these tend to be severely undercollateralized (and as a result, permissioned).
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David Perkins retweeted
The biggest mistake I see founders in crypto make is during the split between the foundation and the for-profit corporation ('labs').
The foundation is now responsible for allocating large sums of tokens (often billions of dollars' worth). But it doesn't have any of the founders or a clear mandate. Your lawyers would tell you to keep the two entities at arm's length. The foundation ends up with a hired leader. This is a recipe for failure, similar to the 'three-generational wealth curse' (wealth getting built up over a generation gets lost after the third).
Founders and startups need to be opinionated about what is good and bad. You cannot be neutral. Foundations must fight bureaucracy, have a simple mandate, and take risks. I see too many processes today that ultimately miss the point.
I hope to see more hands-on, opinionated foundations run by founders in 2025, perhaps avoiding the split in the first place. The current US regulatory regime is part of the reason why things are the way they are. Lawyers tightly dictate how foundations should operate, which is rarely in the interest of the underlying product. Imagine if an external law firm made all decisions about how @nvidia stock is allocated without any input from Jensen. This is how many crypto foundations operate today.
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