Introducing the PoN Relay–A Revolutionary Decentralized MEV Relay

Introduction

Decentralization is the backbone of blockchain technology, representing a revolutionary breakthrough for humanity. But as with any new invention, novel challenges arise. One in particular, threatens the integrity of a decentralized consensus in the Ethereum network. The Ethereum community, including Vitalik Buterin, is actively proposing solutions to this outstanding threat to consensus.

We are thrilled to unveil a game changing solution: the Proof-of-Neutrality Relay (PoN).

Key Takeaways

• Ethereum’s decentralization is under threat from centralized relays and censorship caused by MEV.
• The groundbreaking PoN relay is the first decentralized MEV relay, ensuring privacy, security, and neutrality in all transactions.
• The PoN relay is permissionless and operates on-chain, making it accessible to anyone.
• PoN’s PBS-Smoothing pool ensures consistent MEV payout revenue for solo stakers.
• The PoN relay has the potential to reshape the future of consensus, restoring Ethereum’s position as being credibly neutral and decentralized.

The Issue

In a post on Ethsear.ch, Vitalik Buterin wrote:

“A major risk threatening the ongoing decentralization of consensus networks is the economics around miner extractable value (MEV)”

Elaborating on Vitalik’s statement, the emergence of centralized relay solutions has sprung up as a direct result of the economics surrounding MEV. While Ethereum is designed to operate as a neutral and unrestricted entity, when a majority of blocks are processed through centralized entities that comply with jurisdictional restrictions, non-compliant blocks are censored, which undermines the decentralization of consensus.

It’s important to remember that decentralization is not a clear-cut state, but rather a spectrum. In this blog, we will explore the issues surrounding MEV, the importance of decentralization in MEV relays, and how it affects the Ethereum ecosystem as a whole.

The Scope of the Problem

Over half of all blocks currently being created on the Ethereum network are compliant with the Office of Foreign Assets Control (OFAC) due to centralized relay processing. The use of centralized relays that enforce surveillance on every transaction before it is validated poses a threat to the decentralization of the Ethereum Network. This is an infringement on users’ privacy rights, as transactions may be denied based on corporate policies and jurisdictional laws.

To ensure the integrity of a decentralized network, Ethereum’s middleware must be decentralized, permissionless, and neutral. We believe that the Ethereum community should focus on technical solutions for a decentralized network instead of relying on subjective censorship by centralized relays. Through utilizing cryptography, we’ve created a solution that ensures credible neutrality and privacy in the Ethereum network.

The Solution According to Vitalik

Vitalik believes that:

“The best-known solution is proposer/block-builder separation.”

In the Proposer Block-Builder Separation (PBS) theory, proposers refer to validators, block-builders refer to searchers, and the separation part refers to rebuilding in a way that does not affect the decentralization of consensus.

What the PBS solution proposes is a decentralized exchange for block space, where block-building infrastructure is provided by a neutral relay–the PoN relay.

A PBS Compliant Relay: The Proof-of-Neutrality Relay

The Proof-of-Neutrality Relay is a decentralized and permissionless relay protocol that operates on-chain and provides a solution that maintains complete neutrality in the face of national regulation, similar to Ethereum’s original intent as a decentralized platform.

Traditional MEV Relays Vs. The Proof-of-Neutrality Relay

At the surface level, the PoN relay operates similarly to traditional relays, enabling block builders to submit transaction bundles and validators to confirm receipt of their fees while maintaining the confidentiality of the block’s contents.

However, at the protocol layer, the PoN relay uses Zero-Knowledge proofs to facilitate a builder’s request for a validator while utilizing encrypted communication to ensure the same level of privacy and security. There is also a PBS-Smoothing pool that yields consistent MEV payout revenue, an added benefit available to solo stakers.

Conclusion

It’s important to note that the Proof-of-Neutrality relay is not just a groundbreaking solution to a current problem, it’s a game changer for the future of blockchain technology. With the PoN relay, Blockswap Network has created a protocol that not only addresses the need for separation between block builders and proposers but also sets a new standard for privacy and security in the blockchain industry. The PoN relay ensures that Ethereum can become the decentralized and credibly neutral transaction layer the world expects it to be. The future is bright with the PoN relay, and we are excited to see how it will shape the future of blockchain technology over time.

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