To advance this proposal would be a terrible move by the Bancor community and would be economically negligent to the Bancor protocol. The Eden team, while clearly great marketers, are pushing a deeply parasitic product which seeks to extract rent from the entire Ethereum ecosystem - and Bancor seems to be one of their first targets. It’s imperative we nip this sort of attack in the bud, and even spread awareness to other project teams of the Eden team’s behavior who may be next on their target list.
There are a plethora of reasons why we should not support Eden Network as a project in general. Eden Network is actually (ironically) working towards the very opposite values of what they claim their product creates.
Taken from: FAQ | Eden Network
The Eden Network actually decreases earnings for block producers and decreases network security.
- Running Eden blocks 100% of the time, as required by Eden Network, is not the most profitable behavior for miners. This has become apparent in recent weeks as miners have dynamically turned on and off Eden functionality. Eden Network has yet to respond with slashing miners as they said they would to punish such behavior.
- The Eden Network only works by requiring miners to run an Eden-provided custom forked version of Geth (the most widely used implementation of Ethereum protocol). By requiring 50%+ of Ethereum miners to run a custom version of Geth is deeply destabilizing to the entire Ethereum ecosystem. We are essentially now trusting the very small Eden dev team, who have very little experience writing Go, to write bug-free Ethereum protocol code. If a bug in their code caused the client to no longer perform, Ethereum could more easily suffer a 51% attack.
More than 99% of ETH transactions aren’t affected by MEV in any way, and of those 1% that are, very very few are retail traders.
- This is because MEV only comes into play when extremely large (slippage inducing) trades occur, which causes arbitrage bots to rebalance the price. It is not profitable for an MEV actor to frontrun or sandwich retail-sized trades.
- Tokenless and free solutions already exist for retail users who are placing large trades.
a. GitHub - mevalphaleak/BetaRPC-setup
I hope the irony from the fact that Eden Network is positioning itself as a force against MEV despite literally being MEV is not lost on the reader (it is somewhat genius marketing though). Instead of democratizing access to MEV (in a free, token-less way), it is centralizing MEV (by requiring users to buy a token, where the user with the most tokens wins!)
Next, let me first clear up a couple mistruths disappointingly insinuated by the Eden team during the Bancor community call last week.
50% of Bancor users are NOT having their transactions prioritized. This is due to the fact that a slot tenant on Eden Network can only select one contract (in our case, BancorNetwork) to prioritize in a transaction. If the initial transaction message is not calling that selected contract (BancorNetwork), no prioritization occurs! Bancor Network relies heavily on aggregators for trade volume, who have their own separate contracts, and thus no prioritization occurs when they use Bancor Network! By observing the number of trades calling BancorNetwork for their transaction, and dividing it by the total number of trades eventually routed thru Bancor, we can see that less than 10% of trades were being prioritized while Bancor was a slot tentant!
Taken from: The Bancorian | A Weekly Summary-September 12th 2021 | by Glenn | Sep, 2021 | Bancor
Moreover, it is dishonest to continue insinuating that Eden Network has any effect on tx processing speed. Whether or not Bancor is an Eden slot tenant has no effect on how long a Bancor trade waits in the mempool. Eden Network only affects intra-block ordering. Any anecdotical evidence of “faster transactions” is due solely to EIP 1599, which just happened to release at the same exact time Eden Network revealed their product (what a coincidence!)
The fact that Eden Network continues to fail to respond to these points is deeply disappointing.
Lastly, and more specific to Bancor - this proposal is economically irresponsible to the protocol.
- 20,000 BNT in LM per week is $84,400 a week at present BNT market rates.
- If we take the 10% prioritization figure as shown above, and multiply it by the weekly trade count thru Bancor, there are at present ~1,600 trades per week that would be affected at all from being the Eden slot tenant.
- Taking these two metrics, we are paying $84,400 / 1,600 = $~53 per TRADE for the Eden slot (which most users will not benefit from in the first place, since retail traders are very rarely affected by MEV sandwiching).
$53 per trade is essentially equal to the gas price of a swap on Bancor.
Why would we pay for a service that most users don’t need or know about (and could have for free), when instead we could be paying for their gas swap costs? Do users care more about intra-block ordering, or how much they are paying on gas? My intuition and research say that it’s definitely the latter.
Additionally, Eden Network’s blatant forking of another project, flashbots, has not gone unnoticed. The flashbots team has been actively working on an Eden-like token-less solution that actually does democratize access to MEV and reduce its negative externalities. What little utility Eden token might present now will soon be gone, and thus the price will fall causing massive impermanent loss on the BNT-EDEN pool.