My fellow retards,
The elvish piper was hitting it a bit too hard when he came to the realization that in the future state of the phonon protocol, an operational changemaker may be akin to a present day MEV bot.
Miner Extractable Value, or MEV, is essentially the amount of upside a miner can leverage by dictating when, how and where a specific transaction is placed in a given block. Miners can create additional value for themselves by deliberate sequencing of transactions. You can imagine a miner ordering transactions relating to a specific set of Uniswap trades to insert their own buy/sell at precisely the right step in order to arbitrage off of different buys/sells that the global community has placed. This is essentially front running. Rather than requiring miles of fiberoptic cables, these front runners get ahead through information asymmetry, good code and questionable ethics.
After passing the peace pipe, you may be able to understand MEV-type value accrual for changemakers from a naïve user’s perspective. An end user on Ethereum buying PHONON from the uniswap pool has no insight into the inner workings of the miners. He just knows that he is signing a tx and selling ETH to get more of those sweet, sweet PHONONs. Miners will snipe him and earn off of him, because he only cares about fulfilling the trade and not getting every last sat out of it.
In the context of Phonon, the changemakers sit on the throne of metaphorical MEV. While it is true that users do not have to use them, they sit on an ability to always create the most efficient transactions / on chain settlement possible. If a user wants to go back to the chain, a goblin can sell them a larger phonon lockbox for a series of smaller phonons, thus making a better situation for the user. This becomes a MEV bot-type race when a series of changemaker-goblins compete for that users bucket of phonons.
Imagine a world where there is not one changemaker, but a dozen highly competitive bots. These changemakers may specialize in various chains, various denominations, various currencies. An end user who needs to destroy his phonon to go back to chain could broadcast a request to the many changemakers out there stating which phonons he wishes to sell as a group and then see what bids he receives back. The user will then agree to trade with whichever changemaker charges the lowest fee to provide an acceptable currency in return.
Changemakers will fight against each other, in a way similar to MEV bots today.
The difference is that MEV bots are constantly rebidding higher gas prices to incentivize a miner to pick up their arb trade before another. This means that the MEV trade is being bid up for more value to go to the miner that eventually includes the tx in the next block. In the Phonon context, the bidding of changemakers goes against one another and the value of the bidding gets reverted back to the user in the best possible price.
Changemakers are metaphorically MEV bots, but they compete in a race to the bottom which results in better rates for users. We look forward to a thriving bot ecosystem in Phonon.
Phonon DAO, for the people and for the bots.
Tips to phonongod.eth will be invested in bounties that advance the Phonon project.
Hatemail to phonongod@protonmail.com will be scathingly considered.
Targets for the marketcap of PHONON DAO remain:
$1b by Q2 2022, $12b by EOY.
On the high end, $300b marketcap in 3 years.
Why am i getting the silent treatment?!